FX Industry Trends for 2023 and Beyond

With 2022 almost in the books. We thought it would be a good idea to discuss some of the key trends that we at Panda see being a big part of online trading in 2023. The following insights are based on the requests we’ve been receiving, the priorities of the brokers we partner with, as well as conversations we’ve been having with industry participants at recent expos.

The Mobile Moment Following Apple’s MetaQuotes Ban 

This, of course, is a perennial topic in our industry. Mobile has probably been on the top of most brokers’ respective agendas for the best part of a decade. Why is it still there? Well, the answer is simple, much of the industry has yet to make a convincing transition to mobile. The reasons? These may be a little more complex, but as we’ve repeatedly stated in the past, ad nauseum, it has a lot to do with the off-the-shelf mobile solution from MetaQuotes that many brokers in the industry had gravitated to, mostly for the sake of ease and convenience.  

What’s different this time? Apple’s recent decision to remove MetaQuotes mobile apps from its app store seems to be forcing a change in the industry that it failed to make on its own. The signs were already there. We at Panda have repeatedly highlighted the weaknesses of that specific solution in the past (again probably ad nauseum!) from the difficulty brokers have in differentiating their brands, to the inability to have all of their services (registration, verification, funding, trading) available via mobile. But often businesses don’t make a change until some outside factor forces them to. This time it was bad actors giving the entire industry a bad name and forcing Apple to take action. 

In the immediate aftermath of this decision, the brokers who chose to upgrade their mobile offerings with one of our solutions have found that they now have an advantage over those who haven’t. Our mobile solutions are not subject to this ban because they are fully branded apps belonging to the brokers who choose to implement them. At Panda, we’re seeing an influx of brokers now wanting to take their mobile offerings to the next level and we feel that this shakeup will be good for the industry and allow for more competitiveness and innovation among technology providers. 

Simplified Trading Amidst Increasing Retail Appetites

The next trend we foresee being a big part of the industry, going forward, is simplified trading. There are a few very clear reasons for this. Firstly, ever since the pandemic (some would say even further back to the 2017 boom in crypto) trading has become a much more mainstream activity. With this increased attention on the retail end of the trading spectrum, has come a massive surge in appetites for trading among the general public.  

This has naturally led to providers of these services coming face to face with one of the biggest limitations of the services they offer. Namely, that trading is a little too complex for most lay people. And so, you have a situation where there’s a mismatch between the number of potential clients who truly would like to get involved, and the number that brokers can actually meaningfully on-board and retain. Trading education is great. Explanatory articles and videos can help. But when you get down to it, most fully functioning trading platforms are a bit beyond the grasp of retail clients who are new to the world of trading.  

This is why we at Panda have been flying the flag of simplified trading for quite some time now. It makes sense to have a scaled-down, simplified interface for your complete beginner traders. The effect it has is to keep them interested, and most importantly to give them the confidence to try making that first trade in a manner that the full versions of the platforms on offer don’t.  

As already mentioned, the appetite for trading is already there, in a much bigger way than at any time in the past. The drop-offs now occur when complete newbs find themselves facing the overwhelming array of options and features that cause a significant portion of these potentially loyal clients to hit the pause button on their trading development. They promise themselves to come back when they’ve done some further research. Many of this group never do. This is why simplified trading is extremely important for brokers wanting to make the very most of all the incoming clients that their marketing initiatives have managed to convert.  

At Panda we’ve had our own simplified trading solution on the market, Simplex, for some time now, and it has been a consistent source of volumes for the brokers that have made it available to their users. In many ways, it’s the same story as mobile. Brokers can often be unwilling to try new things when the road ahead is already mapped out for them. But in order to remain competitive, thinking outside of the box and making changes that others haven’t is key. Many crypto exchanges, that operate in a much more move-fast-and-break-things manner, have recognized all of the above, and that’s why many of them were so quick to offer both “beginner” and “pro” versions of their respective trading platforms. We believe that this will also be one of the next mass moves for CFD brokers in the near furture.  

Social Trading as an Engagement and Retention Tool 

In some ways, social trading is an extension of simplified trading, the goal being to keep beginner traders engaged by providing the vital feedback to them that keeps them interested and excited about trading. Social trading goes about things in a slightly different way. Where simplified trading appeals to individuals who just need help with taking those important first steps, social trading is a solution that’s much more attractive to community-minded people, who enjoy the social element of any activity just as much, if not more, than the activity itself.  

There’s a theme developing here, and it’s that in today’s crowded market, simply providing your customers with a platform and a bunch of assets to trade isn’t good enough. It may have been fine 10-20 years ago when the ability to trade over the Internet was so new. With so few brokers offering these services, you essentially had a captive audience back then. 

Today, the potential market may have grown exponentially, but so too has the competition between different venues. Not just that, today you’re dealing with different demographics, and a world of very savvy digital consumers, so it’s paramount to ensure that you’re catering for specific segments as best you can. 

The hardcore traders come with their own demands, and these will have a lot to do with the functionality of your main platform, the assets you offer, as well as the spreads and execution characteristics you should be able to guarantee. As we saw in the previous section, a certain contingent of beginners will require a simplified “leg-up” into the world of trading. And then there’s an entire demographic of social media die-hards who will naturally gravitate to the trading venue that can best replicate that social element for them that they receive from all the other thumbnails on their homescreen. 

One of the main things we’ve been trying to get through to brokers in our industry, is that social trading isn’t just a niche that’s best left to a specific type of brokerage business. It represents a sizable chunk of the new registrations you’re probably already converting and failing to retain. The goal of a modern brokerage should be to target, convert, and retain as many of these different groups as possible. If you don’t, your competition will. Today, with very capable technology providers in the space (like.. Ahem.. Panda), it’s not as difficult as you might think to add social trading to the rest of the services you have on offer. 

If you would like to discuss any of the topics raised in this article, as well as find out all the relevant products and services we have been working on, please don’t hesitate to get in touch.