INTRODUCTION:
Conventionally, a market is defined as an open place or a covered building where buyers and sellers convene for the sale of goods, or the exchange of services. A market can also be referred to as a place where two parties can gather to facilitate the exchange of goods and services. The parties involved are usually buyers and sellers. Most times, the buyers and sellers form the essence of a market.
The scope of a market goes beyond a city square or other fairly spacious site where traders set up stalls and buyers browse the merchandise. A market is a point that connects the seller to the buyer. According to Say’s law of markets, developed in 1803 by French classical economist and journalist, Jean-Baptiste Say, production is the source of demand. I.e. Supply creates demand. Therefore, the point at which a seller can connect with the buyer is called a market.
Imperatively, anywhere can become a market. For example, your bathroom, kitchen, church, mosque, bedroom, and so on, can become a market. So far, there is a connection between the seller and the buyer. In a nutshell, a market may be physical like a retail outlet, where people meet face-to-face, or virtual like an online market, where there is no direct physical contact between buyers and sellers.
There are seven major types of market. We have the physical markets, nonphysical/virtual markets, auction market, market for intermediate goods, black market, knowledge market, and the financial market. The physical market is a set up where buyers can physically meet the sellers and purchase the desired merchandise from them in exchange for money. Shopping malls, department stores, retail stores are examples of physical markets.
The nonphysical markets/virtual markets, in such markets, buyers purchase goods and services through the internet. In such a market the buyers and sellers do not meet or interact physically, instead the transaction is done through the internet. Examples — Rediff shopping, eBay, etc.
Auction market, in an auction market the seller sells his goods to one who is the highest bidder. The market for intermediate goods, such markets sell raw materials (goods) required for the final production of other goods. A black market is a setup where illegal goods like drugs and weapons are sold. Knowledge Market is a set up which deals in the exchange of information and knowledge-based products. Financial Market is a market that deals with the exchange of liquid assets (money).
The financial market in Nigeria comprises of a securities exchange, commodities trading, and trade in their respective derivatives. The global financial market place has a significant impact on our day to day lives, but it is very difficult to participate and benefit from global trends as an individual.
Capital requirements, data costs, and transparency are just a few of the many reasons why trading non-domestic products appear prohibitive. To complicate matters further, converting in and out of the local base currency is inefficient and sometimes the gains made from the investment are significantly impacted by the simple process of exchanging currency.
Eagle Global Markets is one of Nigeria’s leading financial brokerage firm. Eagle Global Market not only makes trading global markets more accessible but we also address issues such as local currency risk and having to contract with foreign entities.
Eagle Global Markets:
Eagle Global Markets is a platform that provides its clients with the opportunity to access the global financial market. It is also a platform that provides its clients with the opportunity to earn money from trading of financial products across the world. This includes derivatives of companies such as Facebook, Google, and Snapchat; as well as commodities such as Crude Oil, Gold, and Silver.
The company was established in 2016. The company has two platforms: the Naira Cloudtrade and then the US Dollar MT4. In less than three years of inception, the company has grown its clientele base considerably from a mere 1000 to 50,000 and still counting. The company is looking to open in major cities in Africa. For example, Nairobi, Accra.
FINANCIAL TECHNOLOGY (FINTECH):
Financial technology is otherwise known as FINTECH simply means the usage of technology to deliver financial services to the general populace and market. FINTECH seeks to put the retail clients first. The Naira Cloudtrade platform is EGM’s (Eagle Global Markets) real innovation. With over 10,000 active traders since introduction.
As one of the outstanding pan African brands, EGM renders the possibility for its customers to ingress global financial markets. The Naira Platform of this multi-asset derivative firm is the most recent of its leading-edge seen to drive its competitors into a catch-up mood.
Globally there was a 45% increase in investment in financial technology in the year 2017, 10.3 billion US Dollars were also invested in financial technology, and ever since then, it has been growing massively. The reason behind this is not far fetched. The world is growing and business moguls are changing with technology.
It’s been crystal clear, user experience has changed rapidly with the introduction of technology. Technology makes things more transparent for the retail client. So that the client would not have hidden charges, and make better user experience from what it’s currently experiencing, or what the client is expected to experience.
For example, it’s been difficult for financial brokers to reach all their clients. But with financial technology, connection and interaction with clients have been much better and faster. Eagle Global Markets has always been about the customer in financial services, but with financial technology, more personalized services have been delivered to its customers.
Financial technology comes with its difficulties, for instance, access to internet services and power. But the most important difficulty is the change in consumer behavior. the study of individuals and organizations and how they select and use products and services.
The retail market is much bigger than what it has been conceived to be. And the ability to learn new things is much higher than previously thought. Eagle Global Markets not only provides financial services but lay down necessary education that would aid their clients, to improve their experience.
With Eagle Global Markets, Naira can now be used to trade let say oil. And growing forward, Eagle Global Markets is extremely optimistic and aims to provide financial services to people more cheaply and transparently.
FACTORS MITIGATING FINANCIAL TECHNOLOGY IN NIGERIA:
Numerous factors are mitigating financial technology in Nigeria. Below are the foremost, most relevant, and major mitigating factors;
- Nigerians do not understand or trust technology.
There is a lack of education generally in Nigeria about the potential of technology to finance and also due to the lack of solid implementations of technology, we witness technology fail all around us regularly. We have ATMs that debit our accounts without giving us the money, we have internet providers that are not consistent in delivering us high-speed internet and having dropped calls and getting scammed by your phone company is a normal occurrence. “There is so much technological failure around us so why should we invest more in this unreliable thing?” When it works it is great but we have been trained time and time again to never rely on technology because it will most likely disappoint us. In light of the above, Nigerians do not trust to invest their hard-earned money on a virtual market they don’t have any iota of trust.
2. Poor internet services.
This is a major mitigating factor in financial technology in Nigeria. Apart from the fact that less than 25% of the Nigerian population accounts for those who have access to the use of smartphone devices, the respective service providers are not consistent in delivering consistent high-speed internet connection.
3. The problem of interrupted power supply.
This has been an age-long problem in Nigeria and for Nigerians. Electricity is the soul of any economy, particularly for small and medium scale entrepreneurs. Taking a brief look at the structure of the Nigerian economy, which is heavily dependent on oil, other major contributors to the nation’s gross domestic product are being frustrated with the existence of interrupted power supply. The financial market in Nigeria also suffers from this plight. And with the existence of financial technology, interrupted power supply goes as far as not allowing traders or intending traders access to various financial platforms when their smartphones or other devices are dead, and needs to be charged.
4. The problem of consumer behavior.
Consumer behavior is the study of individuals and organizations and how they select and use products and services. The human mind is very dynamic and unpredictable. So it’s going to take a lot of convincing and evidence before an average Nigerian would want to earn money by trading financial products across the world.
5. The problem of social fractionalization and government involvement:
Nigeria as a country is faced with a lot of socio-cultural and religious divide. While in some religions, it is a sin to use let say the internet, in some cultures, there are some professions termed acceptable and unacceptable. Government involvement in terms of political stability, policies, budgets, and so on, affects the financial market, which in turn affects financial technology.
FACTORS THAT WOULD ENCOURAGE FINANCIAL TECHNOLOGY IN NIGERIA:
Numerous factors are encouraging financial technology. Below are some of these factors.
- Increased competition:
The moment when financial trading platform providers foster competition via the emergence of new and rising trading platforms, the financial market in Nigeria, which hitherto is a sought of oligopoly would tend to move towards perfect competition.
2. Regulatory changes:
By allowing trading institutions and markets to offer more services by appropriate regulatory bodies, this would go a long way to improve and encourage financial technology in Nigeria.
3. Technological Improvements:
Through a systematic technical approach, the financial market can seek to improve digital technology even up to the point of artificial intelligence.
4. Facilitation of seminars and workshops:
Eagle Global Markets, which is one of the leading edge multi derivative markets in Nigeria, is a major key player in this realm. By organizing seminars and workshops, they don’t only promote their brand, gain more clientele, and teach organizations and individuals about their platform, they, in turn, encourage and promote financial technology in Nigeria.
Other factors that encourage would encourage financial technology in Nigeria includes; cost commodification, profit redistribution, data monetization, and so on.
Conclusion:
There was a time when financial brokerage was almost non existent in Nigeria, but the reverse is the story of late. This foretells that the market isn’t only growing, there is greater visibility that the market would finally gain ground very soon. Eagle Global Markets, as a major key player, is doing a whole lot in actualizing a final safe landing for the global market in Nigeria. Recently we bagged Business Day (BAFI) Awards, for the best digital trading platform of the year. And based on this, we say welcome to the future.
-WINSALA GBOTEMI.
- STAFF WRITER, EAGLE GLOBAL MARKETS.
-First published on egmanalytics.com
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