Mirror mirror on the wall, what does the future hold for brokers?

Author: Albina Zhdanova

As we step into the new year (and the third year of the pandemic), we are both hopeful and cautious about what 2022 will bring.

The past couple of years have shown us that if there is one thing we can be sure about, it’s the unpredictability of life. A global health crisis, negative oil prices, the storming of the US Capitol - who would have thought? However, it’s not only the bad things that we’ve endured. Thousands of people have found a new way of living with a better work-life balance, traders and investors have seen unprecedented growth in revenues, and the lockdown has pushed the adoption of technology in a way that is unlike anything we’ve seen before.

Ultimately, whatever happens will be for the best. But as human beings, we still wonder what the future holds for us. And in today’s article, we will try and predict what the next 12 months will look like for brokers.

Much turbulence is ahead of us. Yes, again

As much as we’d like to think that the year 2022 will be a calmer one, there is little hope for that at the moment. Many factors contribute to us thinking that way: the new variants of the virus, slow vaccine adoption in some areas of the world, international political tension, and interrupted and frozen supply chains. All that screams high volatility. And while volatility is a risk, it is also a great opportunity if brokers and traders are prepared for it.

If you haven’t seen our article on managing risks on a high volatility day, we strongly recommend checking it out. Even though it was written a while ago, it is still highly relevant today. Another helpful guide that we wrote is about preparing your brokerage for the next black swan, which is a must-read for any broker who wants to keep up with their risk management strategy.

Crypto may struggle, but it is here to stay

We didn’t know that there was something more volatile than the FX market until crypto came along. Throughout its brief history, the crypto market has seen many ups and downs, but it’s always been able to make it out alive.

Regulators might be slow and stubborn, but we see slow movements towards crypto’s acceptance. Some countries list crypto as official currencies, and companies like Tesla have also started accepting payments in crypto.

As a result, the demand grows despite all the risks and uncertainties. And we hear more often that traders choose brokers based on whether they offer crypto or not. So, it looks like 2022 will be the year when a large number of brokerages will adopt crypto and start offering it alongside their other asset classes.

Crypto trading is extremely risky for many reasons, but we welcome it with open arms. As a highly technological endeavour, we are confident it will lead to an overall market advancement.

The market is more advanced than ever

With improved technology and easy access to data trading, the landscape is changing too.

Traders these days are much more equipped with knowledge, have higher standards, and implement strategies more than ever before. Isolation normalised discussing important matters online, grouping into communities, and joining different chats with like-minded peers. The Robinhood case is an excellent example of that.

The only thing you can do, or, in fact, you must do at this point, is to choose your providers and partners wisely. Have the right technology with a reliable LP to manage the trading flow, and you are good to go.

The 2021 trends will migrate into 2022

Lastly, many trends that we identified in 2021 will continue in 2022 and beyond.

1. New traders will continue to join the market. Even though the stock market has shown a decrease in the revenues that has scared a few people, making extra revenue is far too tempting for the majority to turn this opportunity down.

2. Content continues to be a requirement. The trading world is notorious for not sharing much information via guides and articles. And although there has been a dramatic change in that field over the last couple of years, there is still a long way to go. And because traders now demand knowledge and want to be more educated, we see no reason why useful content production will decrease.

3. Regulations are tightening up. Governments and regulators are working to make the industry more transparent and regulated. It is a significant trend that creates temporary obstacles for some market players but results in a better, safer trading experience for all of us.

What do you think about the trends we shared today? Please let us know what you think! Email us at sales@t4b.com with your thoughts and questions and to find out how Tools for Brokers can make your brokerage stand out in 2022.

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