The use of mobile devices to place FX trades is growing steadily among institutional traders, according to the findings of a comprehensive client survey conducted by JPMorgan.
In November, the largest US bank by assets surveyed nearly 400 institutional FX traders, of which 61 percent said they’re “extremely” or “somewhat” likely to use a mobile trading app this year, up from 31 percent in 2017.
JPMorgan survey also indicated that 37 percent of buy-side professionals used a mobile device to place orders or execute trades, up from just 17 percent in the previous survey. Specifically, the bank noted that one client leveraged its mobile FX trading app to make a $400 million trade, adding that it’s not uncommon to see $100 million deals executed from a mobile phone.
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JPMorgan Chase & Co. has the biggest market share among foreign-exchange dealers, followed by Citigroup Inc., UBS Group AG and Deutsche Bank AG, according to a global survey of currency users by Greenwich Associates.
Compliance rules are often a deterrent, with half of the respondents saying that their brokers are prohibiting FX trading via mobile devices. The risks arising from using a mobile app, such as security, speed and reliability of execution and price certainty, inhibit their systemic use, especially for more complex order types.
Nevertheless, the survey showed that although security concerns have deterred some traders from tapping FX mobile capabilities, the effective implementation of mobile management systems has improved security features. Financial companies have become more comfortable with using mobile devices as the modern systems use sufficient passcodes to secure login to apps, such as facial recognition and fingerprint readers, which provides additional assurance.
Commenting on the findings, Scott Wacker, global head of e-commerce sales and marketing at JPMorgan in London, said: “We’ve seen quite a shift in terms of institutions allowing people to use mobile devices in the last year. This form of communication is completely transforming how people do things. As products become more electronic, you see more volumes come through, and the transparency increases,” Wacker said. “It creates quite a bit of efficiency, so it allows institutions to drive down their execution costs.”