For the modern foreign-exchange trader, it’s now possible to find a date, hail a cab and trade $100 million — all through their mobile phone.
The world’s biggest financial market is embracing the iPhone era as investors find new ways to work when they’re not on the trading floor. In a JPMorgan Chase & Co. survey of more than 400 institutional FX, rates and commodities traders, 61% said they’re “extremely” or “somewhat” likely to use a mobile trading app this year, up from 31% in 2017.
However, half of the respondents, most of whom were FX traders, said company policy preventing trading on mobile was the main obstacle.
“We’ve seen quite a shift in terms of institutions allowing people to use mobile devices” in the last year, said Scott Wacker, global head of e-commerce sales and marketing at JPMorgan in London. “This form of communication is completely transforming how people do things.”
Financial companies are becoming more comfortable with employees using mobile apps as security features improve, including facial recognition and fingerprint readers, he said. The biggest trade on the bank’s mobile FX trading app exceeded $400 million, and it’s not uncommon to see $100 million deals go through the app, whose biggest users are hedge funds and other financial institutions.
The adoption follows a surge of online, or electronic, trading in the $5.1-trillion-a-day currency market as companies look to cut costs and keep better audit trails for their transactions. Traders conduct about 74% of their notional volumes electronically on average, up from 68% in 2017, according to the survey.
“As products become more electronic, you see more volumes come through, and the transparency increases,” Wacker said. “It creates quite a bit of efficiency, so it allows institutions to drive down their execution costs.”
New MiFID II rules this year also loom large, with 73% of traders in the Europe, Middle East and Africa region saying it would have a daily effect on their jobs. That compares with 47% in the Americas and 45% in Asia Pacific.
JPMorgan’s electronic currency swap and forward volumes have almost doubled since the rules came into effect at the start of the year, according to Wacker.