fintechview sat down with Karina Kowalska, Head of Business Development at Orbex, a financial services firm offering investment opportunities. Karina has over a decade of experience in the Polish market and has witnessed the evollution of this highly competitive market firsthand. Financial markets consist of a huge number of connected vessels that steer the world economy. According to Karina, everyone involuntarily participates in these financial markets to some extent, but the role that different brokers financial institutions have to play is instrumental. Some market participants are much more visible to external observers, while others are completely invisible. In this exclusive interview, Karina shares with us her insights on the role of the Brokers, i.e. the institutions which gives us access to the world of investment opportunities.
Could you share with us your view on where the market is headed?
The recent economic developments led to an increase of regulatory oversight and scrunity. Regulation is essential in order to protect the interests of market participants and force institutions to improve the quality of the services provided. However, this does not always translate to sensible regulations for brokers. There is a lot of competition in this industry, but the number of regulated brokerages it is slowly shrinking. Due to rigorous restrictions, the aim is to centralize such institutions. Therefore, the share of smaller brokers, which are not always able to compete with the dominant entities in the industry, is decreasing. From the broker’s perspective, this can be a major limitation to foreign expansion, and even more so to entering developing markets. Brokers are now forced to meet a number of strict guidelines that do not always go hand in hand with the free market. Of course, the customer should always come first in this environment, and this is the motto that regulators should be guided by, and this is not always the case.
What factors determine the success of a broker?
We can list a number of factors that can determine your success in the brokerage industry. The three main ones are: customer trust, level of education, quality of service.
Customer trust refers to the level of client confidence in institutions. It’s the opinions of existing customers that greatly influence the possibility of acquiring new customers. There is lots of information online and websites that market participants can express their opinions and experiences with different brokers. In this way, opinions are also formed around the overall group of institutions. Of course, review sites are not the only source from which potential clients will gain confidence in the broker, but it is among the most important ones.
The second factor, “level of education”, refers to the quality of educational services offered by a broker. The broker should have services aimed at a wide range of clients and prospects. Educational services will not be so important for advanced FX traders, but it can be determining factor for intermediate and beginner traders looking to learn the basics of online trading and investing. It is therefore extremely important for a broker to focus on education, and at the same time make people aware of the risks involved in investing.
The final factor is the quality of the service provided to clients. This refers to among other things, the execution of orders, the possibility of quick contact with support and useful tools for trading. These three factors are the building blocks of a broker’s success in the sector.
We can also consider what barriers brokers are currently facing. Certainly, we can cite here a few or even a dozen examples, but I have chosen the most important in my opinion. One major factor that has a direct impact on a broker’s operations is the regulatory environment. Very often, the restrictions and requirements of supervisory institutions go completely in the wrong direction.
What is the suggested business development strategy in emerging markets?
Emerging markets are typically characterized by high economic growth. Society is getting increasingly tech-savvy, especially younger generations. The number of people who are looking for alternatives to traditional work is growing. This is where professions like Trader come in. Trading requires a high level of commitment and dedication, but it can be very lucrative. Taking these arguments into account, business development in emerging markets should focus on education and raising awareness about the opportunities presented by the financial markets. Potential clients who want to learn about this industry will feel much more confident when the broker has appropriate educational resources. It is worth keeping this in mind when it comes to broker business development in emerging markets.
Is it difficult to grow your business in the current regulatory environment?
This ties in well with what we touched upon previously when discussing the current market barriers faced by brokers. In my opinion, a socialist transition in society is also visible in our industry. Promoting and developing business in such circumstances is a big challenge. Regulatory institutions often treat investment companies with excessive scrutiny. Increasing restrictions and strict regulations may have an adverse effect on the growth and sustainability of our industry. While it’s important to ensure that investor protections are in place and that clients are aware of the risks involved, fintech companies should also be allowed to grow and innovate. We have come such a long way from the days of brick-and-mortar institutions that allowed only the rich to invest in the financial markets. Regulations should accommodate the growth of our sector and help our industry evolve in a compliant and transparent manner.
Your thoughts on the European market?
Europe is moving towards the elimination of the free market in this environment. Before strict guidelines, a large part of new entities have now folded their operations. Large institutions with an established position remain in the market. However, such institutions are not always more transparent than smaller start-up brokers and institutions. It’s important that Regulators ensure that the current environment allows for new entrants in the fintech industry which will in turn maintain healthy competition and drive innovation forward. Excessive regulation may lead to a monopolistic market with only the bigger players being able to control the markets. This in turn may later lead to higher fees and prices and excessive barriers to entry that harm the retail investor.
How to stand out in the brokerage industry?
This question is certainly asked very often. Entities providing brokerage services, of course, compete with each other for clients to some extent. With globalization, society broadens its horizons and interests. To really stand out in the industry, you need solid foundations and fresh ideas. An important factor here is the availability of markets. I am referring to the number of exchanges, currencies, raw materials, cryptocurrencies that can be traded with a given broker. This can be a great advantage that will allow you to attract customers from different parts of the world.
You will be one of the main speakers at Invest Cuffs 2023 in Kraków, Poland. Could you tell us a bit more about that?
Invest Cuffs is one of the largest events in Europe, an annual conference bringing together the investment market industry – stocks, currencies, commodities, cryptocurrencies, investment funds. It is one of the largest events of this type in Europe. Every year, it attracts experts, representatives of the most important entities in the industry, institutional and retail clients.
This year am attending the Invest Cuffs representing Orbex. Orbex is licensed and regulated under CySEC and investors will have the opportunity to meet me and more senior analysts and educators, to chat and exchange ideas on the markets and explore Orbex’s expert educational materials which can help them make more informed trading decisions. I am looking forward to this event, where I will be both presenting on stage and welcoming everyone at our booth.
Who is Who
Head of Business Development, Polish Desk, and Market Specialist at Orbex, Karina Kowalska has enjoyed a successful career in the financial services industry since 2014. Having graduated from the University of Świętokrzyskie and the prestigious University of Cyprus, Karina has doubled as an independent trader impressive return rates in the FOREX market. Having refined her trading strategies, Karina has worked as a Forex educator at the Fibonacci Team School in Poland and authored the K1 trading system which focuses on trading the German DAX index.
