This month we’ve seen many developments in the trading technology sector, with news of the London Stock Exchange’s potential bids, as well as more acquisitions being made in this space, it questions whether there is room for innovation and whether or not new startups will be successful. Despite this, millions of dollars have been invested into trading tech startups, let’s take a look at the six most widely used and those businesses that are likely to grow further.
The relationship between blockchain technology and trading has been a tumultuous one so far, but many have faith in the future of this form of tech and the cryptocurrency, bitcoin. Based in London, bitcoin marketplace Coinfloor enables verified users to buy and sell bitcoin on an open trading floor, in the same way that a professional exchange would work but is more accessible. As a fintech startup that is backed by Eileen Burbidge, a potential Brexit would mean a lot of change within the business and its operations.
Accessibility and simplified customer experience is becoming a trend and a priority for traditional players in finance and BUX attempts to provide this. As an application that describes itself as a provider of “casual trading”, BUX allows users to experience the stock exchange from their smartphone and 24/7 access to the stock exchange could prove to be useful this year, if 2016 turns out to be another volatile year. Last month, the app raked in a further $6.9 million in venture capital funding and the implementation of Whatsapp-style communication groups and a Twitter-style follow mechanism is becoming increasingly popular.
Regulated by the UK Financial Conduct Authority, Darwinex is a forex broker that pairs traders with investors. The business recently added a new set of products and CEO Juan Colon highlighted how introducing CFDs, or contracts of difference, does come with some risks, according to Finance Magnates. “The bigger issue is that we use sophisticated risk management algorithms that automatically manage the risk of our investor managed account offering (our DARWINs) to a constant level. This requires frequent hedging interventions – and these are not possible if markets are not liquid 24/5 – that was the bigger challenge. The good news now is that our technology is now ready to accommodate other instruments with similar characteristics such as futures – which we’ll add to our offering in due course."
As the world’s leading social trading and investment marketplace, eToro allows users to trade currencies, commodities, indices and stocks. Last month, the platform signed an agreement with Sberbank, Russia’s largest lender in order to provide these services to Russian investors. This deal is big news for the banking sector and the foreign exchange industry - so much that it was announced on Russian late night news when completed, a first for a social trading application. CEO and Chairman of the Executive Board of Sberbank, Herman Gref, believes that eToro is user friendly and has an accessible interface which allows clients to trade with the experience of traders given to them.
Ebury had one of the biggest funding rounds in Europe in 2015 and this SME driven business provides currency services and flexible trading to this sector. Fintech startups have been lucky with investment, according to the Financial Times, but Ebury is one of the few that have raised over $100 million. The position that this startup takes is one that highlights that established banks are only focused on larger corporations and in turn, ignore the smaller business that cannot afford services offered by the financial institutions.