Cyprus’ financial woes have seen the country fare badly in terms of forex investment in recent months. Poor regulation means the reputation of the Cyprus Securities and Exchange Commission, and its licensees, have been tainted. But as Robert Anson, Head of OctaFX’s Development Department rightly observed: “There has been a crisis in economy, not in regulation.” Yet traders remain wary and unwilling to associate themselves with an institution that suffered a monetary crisis. Anson stresses that in today’s world, forex is in many aspects all about investment security.
Security driven decisions
Cyprus’ current unstable situation will prompt investors to look for quieter, more secure places, which will in turn prompt forex brokers to follow them. A lot of forex brokerages are located – or have a presence – in Cyprus, due to its previously beneficial tax jurisdiction. The recent banking limitations and the scheduled closure of Laiki Bank – the country’s second largest bank – have already seen brokers begin to seek out other banks for their operational purposes, capital and clients’ funds segregation.
In the euro’s fragile state, brokers are searching for other jurisdictions that present clear advantages over the eurozone by being more reliable and transparent
Anson predicts that there may be more movement within the industry on the Mediterranean island: “I would say that we might expect some brokerages to change their operation model and move their presence and assets out of Cyprus. We cannot say now how massive it will be, but it is supposed to be a headache for them at the moment.”
Much like the changing investment climate in other countries affected by the Greek crisis, experts predict that the investment climate in Cyprus will alter drastically in the wake of its so-called crisis. Short-term factors such as higher unemployment and a lack of liquidity are already proving problematic, particularly as the domestic GDP of Cyprus is 80 percent service-based. But Anson predicts that the future may hold brighter prospects for Cyprus. “In the longer term it would, in my opinion, lead to growth in the economy.
Since there appears to be an inevitable budget cut, the population will have to get more involved in various private enterprises. Later this fact will see the unemployment rate tend to lower,” he said.
While it is likely that Cyprus will remain in the eurozone, the unfavourable support structure of financially stronger countries sustaining the economies of those that are floundering looks set to continue. This, among other factors, has seen the IMF trim growth forecasts for 2013. However, it is worth considering their conservative nature as an organisation. Lower growth does not necessarily denote a crisis: but a slower, steadier augmentation of the currency.
None of this is aided by the fact that the eurozone is still facing the consequences of the predicaments bought about in 2008: periodical monetary crises and political issues still plague European countries. Anson recalls the consequences of Germany’s reunification in 1990, and how the effects can still be seen in the markets 20 years down the line. “There may be a similar – though many times more complicated – thing happening to Europe now,” he said. “This region has been through a lot over the last 100 years, and my prognosis would be quite optimistic. Europe will eventually overcome what we
call ‘crisis’ now.”
Through chaos comes success
Total volumes traded within the forex industry have risen in recent months, a natural progression considering the inevitable market fluctuations as brokers search for safe havens among the chaos. In the euro’s fragile state, brokers are searching for other jurisdictions that present clear advantages over the eurozone, by being more reliable and transparent. OctaFX predicts that growing markets – such as China – and in the long-run even South America and Asian-Pacific region countries, look set to take leading positions. “It might be a violent thing to say, but the reality is, crisis for one makes new opportunities for others. That’s the global world that we live in, and what the global forex market is about, it’s again an integral part of it,” said Anson.
As forex continues to cement itself as a viable investment option, it is becoming vital for brokers to distinguish themselves from the competition. As a world leading forex broker, OctaFX has worked hard to embrace the ever-changing market, prioritising customer services, both in terms of trading experience and support. “Forex trading is the main service we offer and it must be flawless,” said Anson. “During this year, we have amazingly improved our order execution, making it one of the fastest among forex brokers. We were one of the first to remove re-quotes, so much hated by the traders.”
In addition to eliminating re-quotes, OctaFX currently boast the lowest ECN spread sheets in the industry. In order to get the very best in customer support, its international teams ensure all staff are highly skilled by implementing extended education schemes to keep them up-to-date on all industry trends.
The support operators are obliged to take examinations once every three months to ensure that their skills comply with the highest corporate quality standards. This ensures fast response, efficient client assistance, politeness and professionalism throughout the supply chain. OctaFX’s recent partnership with local banks in China, Malaysia and Indonesia has meant it is keeping up with emerging markets.
Apt regional solutions
During the present financial period, it has sourced cheap and efficient deposits and withdrawals to make sure the smoothest transactions are possible. “Our clients do not have to worry about international wire transfers, various restrictions and other hassles. OctaFX has a complete solution for each region we are present in, and we are always happy to assist our clients in any concern they may have,” said Anson.
Dealing with clients in over 100 countries around the world has allowed the company to address new features and services that further embrace globalisation. Most of these are related to modern forex trading technologies, but OctaFX is also harnessing social networking. “We are in 2013 and it is no longer the world of single traders, but an immense global community and we are doing our best to make sure every opportunity is explored and offered. In short, I cannot express how excited I am about the future of forex trading in general,” said Anson.
There is certainly an emerging trend for social networking among traders. It is becoming more and more commonplace to share trading signals and even particular trades, with people now being able to learn from each other and build upon their global relations. As a result, the industry has rapidly evolved, with the numbers of gurus diminishing as networks continue to expand, and knowledge is shared.
The market truly is at the fingertips of those willing to embrace the changing landscape of the industry. All the mobile and stationary devices at traders’ disposal mean they can connect to clients in any part of the world, at any time in a matter of seconds.
With interaction that has become this instant, it’s no wonder there is a positive outlook for FIFs. Anson added: “Putting it simply, services are becoming better and better and yet at the same time, more and more accessible to clients globally. It makes me very proud to work in a brokerage that is on the cutting edge of these changes.”
While the recent issues in Cyprus may have presented a stumbling block for forex brokers going forward, it has also presented the opportunity to explore new markets. The technological advantages presenting themselves to OctaFX, and the forex industry as a whole, mean that clients have never been in a more advantageous position globally in terms of efficient trading. As the market becomes more saturated with traders, it is of vital importance that firms focus on their customer service so that they can move forward as a whole entity.