What Are the Impacts of Technology on Global Currency Exchange?
The influence of technological advancements is profound and growing. The spread of mobile devices, the internet, and social media has ushered in a new era of innovation. This has impacted not only individuals but also the global marketplace. The growth of technology to the worldwide market has multiple impacts on international currency exchange.
The following are some impacts of technology on global currency exchange.
Decentralized Trading From Around the World at Any Time
Previously, banks and traders had to engage in bilateral communication. People could only trade during regular bank hours. This required several days of lead time for a trade. one bank could not complete a transaction without the other bank’s participation. With the advent of email or web-based trading platforms such as e-commerce financing sites, banks can now conduct transactions with each other while also conducting transactions with their clients at any time. This has allowed for faster transactions, lower costs and less overhead.
Increased Efficiency in Trading Process
The other impact that technology has had on international currency exchange is the increased trading process efficiency. Currency exchanges have traditionally been conducted via telephone or fax between banks and traders worldwide. These methods are now being replaced by electronic technologies such as email or web-based platforms. Traders like Olympia Trust Global Currency Exchange can now complete trades using email or web-based media. This helps them avoid going through the laborious process of completing a manual trade request. It also allows traders to focus on more profitable and efficient trading rather than completing routine activities.
Lower Cost for Both Banks and Traders
Previously, banks would rent space in offices or electronic trading platforms for their participants to work from to conduct business with each other. This overhead cost would be passed on to their clients. As a result, it required them to pay either a higher rate or without the service altogether. Trade can now be conducted via email with electronic platforms instead of renting operating space. With this, banks can charge their clients a lower rate. This cost savings also applies to traders and focuses on more profitable trading activities.
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Increased Safety to Clients
Traders previously relied on a trusted bank or trader to handle their funds and complete trades without error. Banks and traders were centralized. This also meant that their customers’ money was stored within a single location. If a bank or trader were to go out of business, their clients would not have any recourse to recover their funds. With electronic platforms, traders can now electronically move funds and conduct trades with multiple banks at any time. Each bank has its client base and geographic location. Therefore, the loss of a single bank will not impact all of its clients. This provides improved security for traders. It also increases the stability of international currency exchanges and global banking systems.
The world is now flat as globalization continues unabated. Technology has created an era of innovation that has completely overhauled the global marketplace. Every individual has an equal opportunity if motivated enough to take advantage of it. This includes international currency exchanges.
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