Scandinavian Capital Markets recently held its Premier IBs Conference in Johannesburg, South Africa, which turned out to be a huge success. The central theme was the evolution of the Forex landscape and what the future of Forex holds for everyone from a broker and trader point of view. The focus was on adding value and how Scandinavian Capital Markets play a role in improving the trader experience.
The Current State of the Forex market
The Forex Market trades around $6.6 trillion per day, making it the largest asset class in the world. In the last few years, we saw phenomenal growth in online trading. Out of a total of 14 million Global Online Traders, 2 Million Traders (14%) come from Africa. South Africa recorded the highest daily retail trading volume in Africa at $19.1bn (2017), ten times that of 2nd place Nigeria. Africa recorded a 54% YoY increase in traders from 2017 to 2018, while Central America had a 34% increase and Europe a 107% increase.
The oversight of regulated Forex brokers and the role of compliance evolved in parallel with this growth. Various regulatory changes took place, mainly from European bodies, which have implemented more robust guidelines, stricter enforcement, and heftier fines across the board. Ultimately, Forex brokers must guarantee the safety of client’s funds, follow strict anti-money laundering procedures and ensure the best execution of client orders. This higher level of oversight and accountability has led to far better transparency. It also forced brokers to look outside their borders to reduce their operational costs and expand their markets.
Asia and Africa have now become attractive destinations, with South Africa emerging as the new hub in Africa for many regulated European brokers. South Africa has a robust independent regulatory framework known as the Financial Sector Conduct Authority (FSCA). Coupled with South Africa’s strong banking relationships with global economies, this foundation has influenced Forex brokers set up offices in SA.
Future Trends in The Forex Market
Forex Trading is evolving at an exponential rate with new emerging trends:
- The use of targeted data offers predictive quality and access to the big picture by analyzing vast volumes of data with alarming accuracy. Institutional traders already use proprietary technology to exploit this data in-house. However experts are predicting that all traders will soon have access to the same data.
- The era of mobile Forex trading is here as smartphones and tablets become powerfully compact computing devices. Many experts have highlighted this trend, predicting remote investing will dominate the financial world within a few short years. Many analysts claim smartphones and dedicated mobile applications will outstrip traditional forms of static electronic investing.
- Social Media – Online brokers have begun to capitalize on the power of social consciousness through apps that share trading information and activity.
- Global Connectivity – The Forex market can be traded 24/7. And, due to higher levels of connectivity with faster and cheaper access to the internet, Forex trading is rapidly becoming a global activity. Some analysts believe this will dramatically impact emerging markets (such as Africa and Asia). Forex markets will witness an increasing number of investors from around the world, entering into the lucrative online brokerages in the coming years.
- Investments in Forex – There is a shift in the way individuals are viewing investments. They are moving away from traditional retirement annuities and long term investments that lock you in for 20+ years. In many cases, these investments fall way short of their projections. This new investor is looking for transparency, consistent returns and the ability to shift investments around at will. There is a need for both the high net worth investors and everyday individuals to be able to participate in alternative investment portfolios such as Forex Funds involving a broad spectrum of clients.
- Growing millennial market – Millennials represent over 58% of all online traders, by far the fastest-growing sector in the Forex market. Often referred to as digital natives, millennials are comfortable with new technology and expect their user experience to be personalized, and hassle-free. They demand superior service and accessibility, often coupled with the need for instant gratification. If their needs aren’t met, they will swap service providers for the next best thing. Smooth on boarding, mobile apps and seamless deposit and withdrawal processes are an absolute must. Of course, millennials also expect online customer support via social media too.
- Global market penetration – The latest statistics show that the internet is growing at a rate of over 1 million users per day. Out of a worldwide population of 7.7 billion people, we have 4.4 billion people (57%) online. That leaves a few billion users left to make the jump. From 2018 to 2019, the internet grew by 366 million users. Currently, only 0.3% of internet users trade. This leaves immense growth potential.
- Higher regulation standards – Increased regulation means more credibility for regulated brokerages that proactively follow procedures. This benefits the client with increased transparency and protection within a regulated Forex market. Ultimately, embracing the technological developments enables brokers to offer their customers the latest state of the art trading platforms and advanced tools, providing them with a fast, efficient and continually improving the trading experience.
- Advanced technology – Technological boom have reduced trading costs, increased speed, and improved transparency of transactions. This resulted in electronic trading in the Forex market playing a significant role. Consider it currently represents 70% of daily turnover, compared with just 30% a decade ago. Ultimately, embracing the latest technological developments enables brokers to offer their customers the latest state of the art trading platforms and advanced tools. This delivers a fast, efficient and continually improving the trading experience.
How Scandinavian Capital Markets adds value to your trading Experience
Scandinavian Capital Markets is strategically positioned to take advantage of the new era of Forex Trading. Our focus on the client is embodied in our motto, “Everything We Do Is For The Trader.” It’s at the very core of who we are. We aim to differentiate ourselves from the hoards of retail brokers by providing:
- Global prime STP-ECN Forex broker – Connected to top Tier 1 Liquidity Providers such as Goldman Sachs, Barclays, Deutsche Bank, and Bank Of America.
- Large top of book – Perfect for asset managers executing large blocks of trades with high volume.
- Registration – Swedish Financial Supervisory Authority (FSA) (Finansinspektionen Reg. No. 556863-5972) – One of the most important and stable financial trading markets in the world.
- Real segregated accounts – We segregate client accounts with separate margin solutions per account.
- Secure banking – Some of the Top Tier1 banks in Europe, including Swedbank, Nordea Bank, and SEB.
- State-of-the-art global infrastructure – Execution times of 10 ms direct to market, connected to Equinix NY4 Data Center.
- Customizable liquidity solutions – For clients that require flexibility and tailored options.
- Product choice – 40+ trading pairs with institutional spreads (from 0.2 Pips) & low trading commissions.
- Trade transparency – On request, trade receipts for executed orders showing trades filled by specific banks. Always comes with complete control and visibility into all aspects of your transactions.
- Professional traders – Raw spreads + commissions
- MAM Accounts – Multi-Account-Manager (MAM) allows an unlimited number of customer accounts.
- Custom solutions – Utilizes the latest intelligent exchange technologies and provides full-featured back-office to manage risk, trade activities, positions, and settlements.
- Centralized processing – No re-quotes, no delay between each trade
- Multiple platforms – Platform available on MT4, and Web GUI, MT4 mobile allowing traders to trade anywhere anytime.
- Allows Expert Advisor (EA) trading – Manage multiple master accounts having different strategies
- No dealing desk – No Conflict of interest. Just pure STP order processing.
- All trading styles welcome – Including Expert Advisors and hedging.
- Top-tier clients – Including wealth management companies, asset managers, and institutional traders.
- Highly competitive commission rates – Can be reduced for high volume traders to 0.
- Order technology – Including automated trade reconciliation, Smart-Order Routing, proprietary matching technology, and direct access to book limit orders.
- cTrader platform – Ultra-low latency and execution. It provides traders and money managers with a Depth of Market view of the volume being traded. Make it a preferred trading platform for both retail and professional traders alike. Available in the desktop version, web trader, and mobile phone version for both iOS and Android devices.
- Strong affiliate relationships – Treat our IB’s with respect and have an open and transparent relationship. Fully integrated IB back-office terminal, allowing seamless, real-time tracking of client performance and trading activity, with the ability to monitor and manage earnings.
- Easy deposit and withdrawal – Debit card available linked to IB. Trader or investors accounts can have funds transferred and then used worldwide as a debit card to make purchases or withdraw through an ATM — some of the highest rebate programs that are shared with our IB’s and their affiliates.
- Clients first – Scandinavian Capital Markets puts the clients at the centre of the business. We believe strongly in building long-lasting client relationships based on trust and transparency. Whether you are a money manager, an introducing broker, an affiliate, or a professional trader, you’ll find our support staff knowledgeable, helpful and available 24×5.
- Investments – Access to global hedge funds with AUM of $1.8 billion, producing a solid 36% net return year on year for the past 9.5 years.
Scandinavian Capital Markets is well equipped to handle any client demands. The times are changing, and Scandinavian Capital Markets is moving ahead “The Future of Forex is Here.” For any further queries feel free to contact me at email@example.com or visit our website.
Written by Stephen Nefdt, Representative of Scandinavian Capital Markets in South Africa
Stephen Nefdt, owner of Forex Wealth in Cape Town, South Africa. With over 15 years of experience in all aspects of Forex Trading, Education and Trading System Development, Stephen knows what it’s like to navigate the murky waters of Forex trading. While he began his career as a mechanical engineer, he became intrigued with trading at an early age. While he trained for the Iron Man triathlon and worked at several different engineering firms, he admits, “in the background, I was always trading stocks.”
Photo: Jacques Nel