The world of forex trading has seen several tectonic shifts in recent years. With several technologies entering the fray, more and more efficiency has been infused into the system and newer trading opportunities have been created for traders. However, what is interesting is the fact that a lot of technology from the banking industry has also found its way into the forex industry. Thanks to innovations in the banking space through the advancement of Fintech, several new technologies and processes are now being adopted into the forex domain. This adoption is more evident in emerging markets like Sri Lanka, where forex trading and CFD trading are prevalent
What is Fintech?
For the uninitiated, Fintech stands for Financial Technology. It refers to the emerging technologies and concepts that are aimed at disrupting the way the financial industry operates. Backed by the Smartphone revolution and increase in the consumption of the internet, several technology players have emerged with the aim of developing processes that either replace the existing banking system or augment it.
Fintech basically consists of four major areas – data, software, payments, and platforms. Each of these represents a portion of the banking process and Fintech works to improve upon the existing online trading system or replace it with a better one.
How Fintech is leveling the playing field in forex trading
The technology that has taken over the banking industry is now slowly finding its way into the online trading industry in Sri Lanka. For example, technologies like cryptocurrencies which have gained traction in the last ten years have set out to create a banking system without a central bank that can manipulate and influence the flow of currencies. Such technologies promise a scope for improving the forex trading industry as well. Case in point is the blockchain technology, which is considered the next big thing in this area.
The blockchain technology which was developed as a part of the Bitcoin network, one of the world’s earliest and most successful cryptocurrencies, is capable of acting as an open and decentralized ledger that can record transactions efficiently in a verifiable manner. It is resistant to modification and is considered hacking-proof.
Developing an automated system to reduce the time and resource diverted to this process and make forex trading a more efficient activity and help traders register their profits quicker. Such a technology could be revolutionary in the forex market in new markets where online trading brokers in Sri Lanka like WesternFX spend enormous amounts of money every year to verify and authorize the trades.
Keywords: forex trading, WesternFX
By: Thehan Divan
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