Boston, May 15, 2013 – Retail FX continues its drive to reach a mainstream audience, according to recent research from Aite Group.
About 5% of Japan's adult population has opened retail FX accounts, and penetration in Russia is not far behind. The comparable rate in the United States is about 1%.
In China and India, the rate is a fraction of 1%, and yet traders from these two nations are emerging by the tens of thousands without waiting for official government sanction of retail FX and/or despite government prohibition of the practice.
Retail FX has already surpassed stock trading in popularity by some basic measures. For example, the average Web traffic to the three largest retail FX/CFD brokers for 2013 is 33% higher than the average number of visitors to the top three largest stock trading firms in the United States. This gap will continue to expand as retail FX opens the door to millions of people who lack the capital to invest in traditional cash markets and the product sophistication to trade in futures/options on-exchange markets.
In light of increasing regulatory costs, Aite Group believes that retail FX broker firms should set their sights on a handful of emerging and developing nations to build scale and take advantage of demographic and Internet adoption changes. These will shift the industry over the coming years toward the emerging and developing nations of Asia, Africa, and Latin America.
“In light of higher regulatory costs and steep investment expenditure required to grow in new markets, the most sensible approach for brokers is to focus on solutions that lower technology costs, reduce regulatory reporting and auditing costs, and make business operations easier to port into new languages,” says Javier Paz, senior analyst in wealth management at Aite Group.
This 61-page Impact Report contains 49 figures and three tables. Clients of Aite Group's wealth management service can download the report.