LR: According to you, what are some of the issues in the financial sector at the moment (let’s discuss banking and payment solutions, for example)?
One of the main problems facing existing and new brokerages is that they cannot set-up accounts with tier 1 banks to manage payments. They are forced to use tier 2 or 3 banks and to patch together payment services for different countries often using a series of middlemen, with no guarantees and high costs. This is untenable and we believe there has to be a better solution which is why we are moving to establish a digital bank which will just work for brokerages.
Tier 1 banks, faced with changes to international regulation, such as the introduction of Basel III; data security and identity verification; and compliance procedures do not want to commit resources to this area. They do not have the depth of experience to quickly identify poor practices in some brokerages which could lead to increased risk. Whereas we understand the model and can recognise risk events and know how to manage them.
We have taken the view that as an experienced broker we know the sector, the requirements and the issues and so are very well placed to be able to structure the banking services other brokerages need. We have the knowledge and ability to cover KYC and AML requirements in the sector and if brokerages can access high-quality banking services, this will help improve the image and reputation of the whole sector.
LR: Is 2020 the year of radical changes for the industry? What has changed for the retail trading industry so far in 2020, and what to expect in 2021?
Every year we see radical changes to the industry as new products come and go. The health pandemic has created volatility and also energised different areas of the market, including oil and gold. Which of course has created opportunities as well as risks for retail traders.
For the rest of the year we can expect to see ongoing volatility, with high levels of quantitative easing creating false markets as the world comes to terms with economic reality of lockdown. In 2021 we believe that investors will have a new view of the world which will require fast access, better technology and the ability to trade anywhere at any time.
LR: What are the key traders’ demands in 2020?
This is straight forward, it will be access and products. Traders want an easy to use, fast and comprehensive financial services ecosystem which allows them to invest in the products and instruments of their choice. From commodities to cryptocurrencies they have the access to data and information which allows then to follow the markets but need a partner which takes them through to execution.
This requires a new type of broker, a broker ++ model.
LR: What is your opinion on the current market coronavirus situation in the industry?
I think this moment in time represents the opportunity for us all to change the way we offer our services as well as the type and range of products we offer. Almost every business in the world is being forced to look at its strategy and how it provides services.
After Covid-19 every person and every business will be digital. WFH will replace OOO and everyone will need to invest I technology to interact with clients in their new locations and roles.
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