Market Outlook for 2022: Measures that Help Forex Brokers Grow

The forex industry sees strong recovery in every aspect after experiencing extreme market volatility and difficulties in managing employees working from home. Expos were held in Cyprus and Dubai, where people had the opportunity to get back to face-to-face networking.

The global forex market seems to have come back to normal with a series of forex brokers reporting record-high trading volumes despite ASIC's CFD product intervention order took effect on March 29, 2021, including Exness , TMGM, Swissquote, and IC Markets.

Other than forex, many brokers are flocking into the crypto market driven by surging price of Dogecoin, which, interestingly, is largely affected by Elon Musk's twitter rather than price movements.

Under this background, how should a forex broker win more customers and outperform in the market?

Crypto Matters

An increasing number of forex brokers have added crypto to their offerings, such as FxPro, etoro, and Dukascopy. It is predictable that crypto would play an important role if a forex broker wants to attract more audience or differentiate from other competitors.

As crypto market is less regulated and prone to more significant and frequent volatility, it will definitely bring more profits to forex brokers. A survey showed that 87% of the respondents planned to invest in digital currencies. However, crypto liquidity is not as mature as forex. The most liquid cryptos include Bitcoin, Litecoin, Ethereum, and Ripple, according to Fazzaco’s investigation on the crypto market.

If a forex broker wants to take crypto as an attraction to its customers, then connecting to a stable crypto provider may be its top priority. Poor liquidity and large price movements in crypto instruments may easily cause an account to blow up, discouraging a trader, whether he is a newbie or a veteran.

It is expected that in the years to come, forex brokers will focus more on cryptocurrency or start to launch more crypto instruments, and many of them will accept transfer, withdrawal, and deposit through crypto currency.

Diversification

Similar to other industries, forex brokers are usually driven by market demand, i.e. the demand of retail forex investors. But some time, they would take the initiative to make favorable changes. Forex, bonds, equities, CFDs, indices, bullions, ETFs, energies, commodities, future, options, spots, forwards, and all the other instruments should be taken into consideration by a forex broker in the next development stage as multi-instrument broker is an inevitable trend.

It can be predicted that forex start-ups would seek more instruments and they may face higher threshold compared with those who started earlier.

Offshore License More Favored

To prevent scams and combat frauds, ASIC adopted stricter rules to set forex leverage limit at 1:30, the same as CySEC, which adopted ESMA's rules after scrapping its three tiers of leverage in 2019.

Tightened regulation among reputable regulators forced forex brokers, particularly forex start-ups to seek offshore license in jurisdictions such as Seychelles(FSA), Mauritius (FSC), Saint Vincent (SVGFSA), and Vanuatu (FSC).

Offshore license may be a cost-efficient choice for forex start-ups, but not a perfect one if you have ambition to make your own business into a top-flight one. Offshore licenses do provide higher leverage, but with it comes high risk to both investors and forex brokers.

It will be a trend that forex start-ups would choose to apply for an offshore license and grow to a certain level before seeking a CySEC, ASIC, or FCA license.

Abolishing Inactivity Fees

To survive in the increasingly fierce market competition, many forex brokers announced to abolish inactivity fees, providing more comfortable conditions for their traders who have their funds in custodian accounts for long period of time to wait for trading opportunities. ETX Capital and Saxo Markets are two examples.

Removing inactivity fees can be seen as an indirect approach to encourage retail clients to keep trading with the broker. Lowering inactivity fees and other commissions (e.g. fixed monthly fees) would become more common as it costs little to brokers but sounds attractive to retail customers.

Sponsorship

When it comes to sponsorship, what's in your mind? What field will you choose if you want to get maximized exposure? The answer, as demonstrated by multiple forex brokers, is and should be soccer.

Go Markets, IC Markets, eToro, CAPEX.com, and many other forex brokers have become sponsors for soccer clubs across the world. The reason is simple. Soccer is still the most popular sport in the world. And most soccer fans are males, which takes a larger proportion than females.

In this aspect, forex brokers need to learn from crypto and blockchain companies, as Zytara Labs has partnered with Inter Milan to create digital collectibles for fans around the world. Inter fans will have the chance to make a crypto purchase using XDB token.

As many sports game have resumed, we can see more their logos in the coming year. Guess will any broker support a team in the 2022 Winter Olympic Games?

Conclusion

In a nutshell, there is no one-size-fits-all solutions in the market. But Fazzaco can always provide you with customized marketing services. At Fazzaco, you can find your partners, learn market trends, study B2B forex knowledge, share your views through content, and get maximized exposure.

If you are interested in our website, please feel free to contact ad@fazzaco.com