The global financial system has been in total upheaval with the continued outbreak of the Covid-19 or Coronavirus.
This in turn has yielded a significant impact on the Financial Services industry and especially the online trading industry, an impact which will likely last for years to come.
With countries forcing mandatory quarantines globally, online activities have skyrocketed.
For its part, the trading industry has been no exception. Volumes across virtually every asset class have experienced a major boost in Q1 2020.
Markets Experiencing Swings Not Seen for a Decade
A key factor that has contributed to the proliferation of online trading recently is the sudden spike in volatility.
FX, commodities, cryptocurrency and stock markets have been experiencing volumes and swings not seen since the Great Recession, creating a highly dynamic trading environment.
Times of uncertainty and volatility never cease to attract investors. The outbreak of Coronavirus has been exactly that catalyst, helping jolt currency and stock markets into action.
Consequently, the fallout of markets has attracted all types of investors, first time traders and veterans, novice small time investors and whales.
Starting February 2020 and continuing still in March, we have seen the collapse of markets, including several major ones such as oil and the US stock market.
In particular, bellwether indices such as the S&P500 in the US had incurred a nearly 35 percent decline over a one-month period.
Conversely, gold has skyrocketed over this same period, seemingly breaking the market with investors scrambling to get their hands on the yellow metal, not to mention opportunities also made available to crypto buyers, with Bitcoin’s decline providing a long-awaited entry price.
Individuals looking to capitalize on daily trades and market swings are already identifying the emerging lucrative trading opportunities.
Many prospective traders with an instinct took notice of the markets spiraling out of control and acted according to their trading analysis of the situation.
Why the Online Trading Industry Will Be King Beyond 2020
In light of this seismic shift, the online trading industry has become uniquely positioned to satisfy this groundswell of demand for financial instruments.
Global exchanges across every asset class have already reported sizable growth in volumes. On the retail side, the timing has never been better to enter into the online market trading space.
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This includes opportunities for ordinary investors and companies looking to launch a brokerage or a new brand independent from its existing trading platform.
“We are seeing an unparalleled level of interest in the retail space during Q1 with the pool of investors exploding virtually overnight. The premium for these types of services hasn’t been this high in years,” explained Jeff Patterson, Head of Strategic Content at Finance Magnates.
Moreover there are many call centers now shifting their focus on expanding their activities and manpower in order to utilize the increasing demand for online financial support
Indeed, with such a large swath of the population stuck in quarantine for the foreseeable future across continents, the demand for trading platforms and the newly found interest by first time investors in online trading has surged.
The daily news cycle has given extraordinary emphasis to financial markets, helping permeate the public in ways marketing teams never could.
This has fueled the demand for brokerage and related services operating within the Fintech sphere.
On an industry-wide level, several prominent brokerages have already experienced surges in this growth, both in terms of clients and volumes.
Brokers have also held strategic advantages over banks in this regard, given the prevalence of higher fees and lengthy lags in account processing.
Other leading service providers in the industry such as Smartologic Technologies have also found themselves booming with activity as part of their offered solutions for Fintech related call-centers.
“If you aren’t in the online trading industry then you are looking to get in. All-in-one CRMs or white labels are the name of the game with venues looking to capitalize on this demand,” added Dror Lupu, CEO of Smartologic Technologies.
The silver lining of the Coronavirus outbreak has been the discovery of a previously illusive segment of the market. Indeed, many of these individuals are looking to make an initial foray into trading and take their first steps.
The conditions for emerging traders was favorable even prior to the outbreak of the virus. For example, recent regulations by ESMA with decreases in volumes have made trading more friendly to less-experienced investors.
The trends for this growth are not likely to abate any time soon either. Additionally, brokers are better prepared now than ever before against a range of cyber threats. The emphasis on cybersecurity is also a draw for investors in what has become an increasingly unsecured world.
The demographic of potential traders is now the largest it’s ever been with millions of quarantined employees now faced with more time and a larger reliance on financial markets.
Ultimately, this could shape up as a 1 in 20-year opportunity with brands, brokers and call-centers wasting no time in taking the leap and entering the market. Nobody wants to be left behind during a moment such as this.