Forex Traders Embrace the SmartPhone Era
$USD, $JPY, $EUR, $GBP, $CNY
The world’s biggest financial market, Forex, is embracing the SmartPhone era as investors find new ways to work when they are not on the trading floor.
In a JPMorgan Chase & Co. (NYSE:JPM) survey of more than 400 institutional Fx, interest rates and commodities traders, 61% said they’re “extremely” or “somewhat” likely to use a mobile trading app this year, up from 31% in Y 2017.
Bur, 50% of the respondents, most of whom were Fx (forex) traders, said company policy preventing trading on mobile was the main obstacle.
“We’ve seen quite a shift in terms of institutions allowing people to use mobile devices” in the last year, said the global head of e-Commerce sales and marketing at JPMorgan, London. “This form of communication is completely transforming how people do things.”
Financial companies are becoming more comfortable with employees using mobile apps as security features improve, including facial recognition and fingerprint readers, he said.
The biggest trade on the bank’s mobile Fx trading app exceeded $400-M, and it’s not uncommon to see $100-M deals go through the app, whose biggest users are hedge funds and other financial institutions.
The adoption follows a surge of online (electronic) trading in the $5.1-T-a-day currency market as companies look to cut costs and keep better audit trails for their transactions. Traders conduct about 74% of their notional volumes electronically on average, up from 68% in Y 2017, according to the survey.
As products become more electronic, you see more volumes come through, and the transparency increases. It creates quite a bit of efficiency, so it allows institutions to drive down their execution costs.
New MiFID II rules are having a major effect, with 73% of traders in the Europe, Middle East and Africa region saying it would have a daily effect on their jobs. That compares with 47% in the Americas and 45% in Asia Pacific.
JPMorgan’s electronic currency swap and forward volumes have almost 2X’d since the rules came into effect at the start of the year, according to Wacker.
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