On Thursday the IMF and the World Bank released a paper intended to function as a guideline for regulators regarding the fintech industry. The paper contains 12 elements which will definitely affect the trading world as well as the rest of the fintech industry. So what changes can we expect for the fintech industry, and more specifically the trading business?
The Rise of Mobile Trading
Before we get into the actual paper itself and the implications it can have on the trading industry, we’ll quickly cover the industry itself. In order to make the connection between the guidelines and the future of trading, one needs to understand where the trading industry is headed.
Over the last couple of years, mobile trading has become the latest trend, especially among new traders in the regions of Africa and Asia. And while brokers are currently focusing on optimizing their mobile software for the European market as seen in the increase of amazing trading apps in the UK, we can expect to see the IMF’s guidelines have a bigger impact on trading in other parts of the world.
The IMF and the World Bank’s Guidelines
During their annual meeting in Bali, the IMF and the World Bank released a joint paper called the Bali Fintech Agenda that’s aimed to serve as a guideline for regulatory bodies overseeing the fintech industry. The goal of the paper is not to limit the fintech industry or change any regulations. Instead, the purpose of the Bali Fintech Agenda is to offer suggestions for changes that can become necessary in the near future.
The paper is divided into 12 elements that are mostly focused on creating a safer and fairer market space. For example, the paper states that we need to start providing new smaller fintech players the same opportunities as their larger competitors. It also encourages us to be more inclusive and reach the millions of people that handle their finances on mobile devices, and outlines the need for countries to protect the global financial system.
Naturally, these are all good points to follow, and even though they were sort of expected, we should count on seeing some changes.
How Will the Guidelines Affect Trading?
If the world’s regulatory bodies decide to follow these guidelines when updating their policies, we should expect to see the industry boom. No one, especially not the IMF or the World Bank, wants to hurt the fintech industry and the guidelines are mostly positive.
For example, if policies are updated to be more inclusive in areas where people use mobile devices as their main device such as in Africa, the brokers will reach more customers and increase revenue. In turn, this will allow them to update their mobile trading software.
Also, regulation can become stricter in order to protect customers, which would create a safer trading environment that’s more attractive to new customers.
All in all, we should consider the input from the IMF and the World Bank as positive news for the fintech industry in general and not only for the trading sphere.