Retail Trading Tech in 2019

Happy new year colleague Finance magnates Reader! We hope you enjoyed the holiday season, and whether you're shooting a dreidel or roasting a turkey, you've been able to eat and drink as much as possible in the last two weeks.

Now, unfortunately, it's all over and we poor plebeians have, once again, put the cold and winter nose at the mole of work that is turning more and more. But before you're too upset about this, we thought we'd give you a bit of excitement to kick off the new year by taking a look at the latest and most interesting technological developments of the last twelve months.

As Confucius once said, in the real inspirational fashion inspired by LinkedIn, "study the past if you want to define the future." Yes, we will look at the technological trends of 2018 but they are the same trends that will influence the next year here on planet earth. Excited? I thought so. Get comfortable, it will be a wild ride.

Increase of the professional

Already in August, as you surely know, the European Securities and Markets Authority (ESMA) has introduced a series of product intervention measures. Binary options bans, leverage ceilings on difference contracts and risk warnings were the name of the game

There was – and still is – a way around these restrictions. Anyone who qualifies as a "professional trader" can still use a broker located in the European Union to negotiate with a high leverage.

It is therefore not surprising that 2018 saw a host of companies launching professional trading platforms to adapt to a broader strategy of attracting a richer and more professional client base.

The most recent example arrived just before the Christmas holidays began. In early December, Ayondo, a retail broker, announced that he would launch AyondoPRO. The only thing "PRO" about it, however, seems to be the ability of users to operate with a high leverage on the platform.

Ayondo was not the only one to launch such a platform. CMC Markets, InterTrader, Activtrades and FXCM have reinforced their professional trading platforms or have launched new ones completely in the last twelve months.

These new products would seem to mean two things; some companies are trying to adjust their business strategy and focus on attracting fewer richer customers. Other companies adhere to the model of abandonment and consumption and, to support this, they are simply converting all their clients into a professional state.

Artificial intelligence

Artificial Intelligence (AI) is a bit like God, everyone talks about it but they seem to have a different conception of what it actually is. Just like John, the author of Revelation, they also think that his introduction will bring interesting changes to life as we know it on earth.

By the end of 2018, the planet had not turned into a dystopian future of I-Robot-esc. Nevertheless, we are starting to see artificial intelligence infiltrate the retail brokerage sector.

The most notable in this regard was Capital.com. Since its launch in 2017, the broker has made its artificial intelligence education system a focal point to attract new customers.

The system works by examining a client's trading models. It can then identify biases and problematic behaviors and tell the client how to prevent any improper business decisions that might derive from them.

From the customer's point of view, the effectiveness of this system is questionable. Capital.com follows a common pattern with just under 80% of customers losing money. But how Finance magnates reported last month, most customers are right most of the time when they trade – they will only lose more than they earn from their loss-making operations.

More interesting things are probably happening in the sales space. Impact Tech, a technology provider for the retail sector, has launched an automated sales solution at this year's mogul finance summit that, in a rather gruesome way, can make calls to potential customers and aboard.

In fact, it could be from this part of the business – marketing, customer relationships and lead generation – that we see the greatest use of artificial intelligence. The newcomers on the market, such as Antelope Systems, are an example.

The company was launched towards the end of 2017, but the year really began with the appointment of Ori Hazan as CEO at the beginning of February. As with Impact Tech, the company uses advanced spectral technology to make a company's lead and marketing activities more efficient.

Of course, given the enormous potential of AI, every Tom, Dick and Harry is sticking the label on their product, even if it's just a dialup dialup connection. Remember to proceed with caution then Finance magnates reader, there are many beggars out there in the ether.

The year of the blockchain

Speaking of beggars, the blockchain was probably the technology of 2018. Have you not yet decentralized your hot cryptocurrency portfolio with the distributed register? I'm shocked.

The utility of the blockchain is more than debatable. A very denounced study, published in November, found that technology, at least in cases where it was used to support international development and humanitarian aid, had no practical use.

The three authors of the study contacted 43 different companies building products that, in their opinion, could support international development. Of these 43 companies, none has been able to support statements made about the ability of their products to reduce costs, increase transparency and improve operational efficiency.

However, blockchain is definitely doing waves in both retail and institutional space. The most noteworthy regarding the latter was the Cobalt. The after-sales service company has created a blockchain system that claims to be able to reduce after-sales costs by 80 percent.

The success of these projects depends strongly on the willingness of financial institutions to engage with them. This was something that solves the CLS giant discovered at the start of this year when a significant portion of its potential customers were unwilling to start using its blockchain-based payment settlement solution.

"The biggest challenge for us [in 2019] is clarifying the obstacles needed to work with established financial services companies, "said Adrian Patten, co-founder and president of Cobalt. Finance magnates. "The risk management of sellers at banks consists of multiple levels of legal, compliance and risk management requirements: New suppliers have to go through a significant number of frames to overcome this process, however, if current incumbents have sought going through this process, they would not be able to meet all the requirements, so new businesses are kept at a higher level than existing incumbents. "

Again in the sales space, the mass introduction of cryptocurrency trading products has been the most noticeable effect of blockchain technology. When we enter the early days of the year 2019, you will struggle to find a single retail intermediary that does not offer cryptocurrency products.

In fact, the legend tells of a number of retail brokerage owners who have gone on to offer only cryptocurrency trading. How respectable those owners and their operations are another issue.

Many of the opponents can claim that cryptocurrency trading is kaput since the value of Bitcoin has been tanked since November 2018. It could be true, but it would be equally valid to say that it is a positive step for the world of retail.

The hype surrounding blockchain and cryptocurrency at the start of 2018 was not sustainable. Maniacal traders, rich in earnings, that popped out, were no longer in the long run and, more significantly, were easy prayers for unscrupulous scammers.

A market that gets rid of people who want to make money quickly also expels many brokers who want to steal those people's money. So yes, the clamor of blockchain and cryptocurrency has declined, but it could be a very positive thing for the retail sector: bring the new year!