Challenging the traditions of trading

By Rob Brockington, CEO, Finatext UK Ltd

With over a decade’s experience running algorithmic engines on the trading floor, including eight years running Deutsche Bank and HSBC’s tech teams, CEO of Finatext UK Ltd Rob Brockington was disillusioned by established financial institutes’ approach to digitalising old practises. Now he’s making currency trading digitally native with his first mobile app Pipster.

It can be a sobering moment when you’ve been working on and around the trading floor for 12 years to look around and realise just how disillusioned you’ve become by what you do. The trading industry has evolved dramatically in the last few decades; major fintech advances have seen online brokers and trading platforms introduced to the global market, while the powerful influence of social media has added a new dimension to trading.

However, while the traditional financial industry may be digitalising rapidly, other aspects remain very much the same. The world of trading has kept its reputation as an exclusive place dominated by the rich and well-connected, the elite of the elite, where power and influence are driven by dollars and pounds. So, for the average joe, breaking into the trading market, and making a genuine return can feel nigh on impossible.

On top of this, investing brings a number of other daunting challenges. The sheer volume of information and navigating market inaccuracies can be overwhelming for an inexperienced investor, while overconfidence, unrealistic expectations and a lack of specific financial know-how can all stop a novice trader in his or her tracks.

However, that’s not to say it is an impossible task – there have been substantial technological disruptions in financial trading for retail clients. Retail investors – people who are investing their personal capital – have become an influential part of the global market, and with this new demographic of investors comes a new opportunity for brokers.

It’s time to disrupt the traditions of trading and offer people an equal, more accessible way to invest – and it starts with education. Transparent, fair and easy to understand information.

One of the primary issues for many retail investors is the lack of familiarity with trading and financial literacy. Our society does little to champion it, schools don’t touch on it and negative headlines appear in the media more often than not. Why then, would you feel comfortable taking the leap into the market? True risk awareness paired with education is the key to expanding the retail involvement globally.

Many believe they need to be experts to start investing; you don’t. You just need access to the right resources to help you learn the basics, an understanding of sensible risk management strategies and, in addition, access to new technologies such as AI and automated platforms, which are already making marks on this industry. There are resources online that help to simplify financial jargon and it’s important to familiarise yourself with them before you start to invest, but these can feel disjointed and, if not written in a language everyone can understand, leave you more confused than when you started.

Many also believe they need a huge amount of capital to start investing; you don’t. A recent survey by Tangerine Investments found that 70% of non-investors said they don’t have enough money when asked to select the reasons why they don’t invest. The truth is you can start investing for a small fee each month – it is a common misconception that you need a deep pockets to start trading. So, in reality, there is no time like the present to make your money work for you, and in the long-run, your investments should produce far greater returns than those you’ll receive from even the best savings accounts, as long as you work to create a true strategy, rather than throw in money based on emotion as many newcomers do.

The mystique that’s surrounded financial trading till now is slowly falling away – and we have the rise of cryptocurrency, technological advances, and the sharing economy on social media to thank for that. Financial institutions must now share their knowledge and democratise the metaphorical trading floor for anyone that wishes to be a part of it.