The effect of forex trading platform enhancements on transaction costs in banking: a case study of Accord Microfinance Bank
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Background of the Study
Foreign exchange (forex) trading platforms are integral to modern banking operations, especially in a globalized economy where cross-border transactions are commonplace. Accord Microfinance Bank has recently undertaken significant enhancements to its forex trading platform, aiming to reduce transaction costs and improve the efficiency of currency exchange services. These enhancements include the integration of real-time data analytics, improved user interfaces, and advanced security features that ensure faster and more secure transactions (Ike, 2023).
The modernization of forex trading platforms reflects a broader trend in digital banking where technology is leveraged to streamline financial operations and reduce operational overheads. For Accord Microfinance Bank, reducing transaction costs is critical for maintaining competitive pricing and attracting a broader customer base. Enhanced forex platforms allow for more precise pricing, better risk management, and increased transparency in currency transactions. These improvements are expected to result in lower costs for customers, thereby fostering greater trust and loyalty (Nwankwo, 2024).
Furthermore, the integration of advanced algorithms and real-time market data helps the bank respond swiftly to fluctuations in exchange rates, minimizing potential losses and ensuring that customers receive competitive rates. The bank’s commitment to technology-driven innovation in forex trading is not only aimed at cost reduction but also at enhancing overall operational efficiency. This dual focus is critical in an industry where even marginal improvements in transaction speed and cost can lead to substantial financial benefits (Okafor, 2025).
This study investigates the impact of forex trading platform enhancements on transaction costs at Accord Microfinance Bank. By analyzing performance metrics, customer feedback, and transaction data, the research seeks to quantify the benefits of technological upgrades in forex operations. The findings will provide valuable insights into how digital innovations can reduce operational costs while maintaining high levels of service quality and customer satisfaction (Afolabi, 2023).
Statement of the Problem
Despite significant technological enhancements to its forex trading platform, Accord Microfinance Bank still faces challenges in achieving the desired reduction in transaction costs. One primary issue is the inconsistency in the implementation of the new platform features across different trading channels, which has led to variability in transaction processing times and cost efficiencies. While some channels demonstrate improved performance, others continue to experience delays and higher operational costs (Balogun, 2024).
Moreover, the adoption of advanced algorithms and real-time data feeds has introduced complexities in system integration. Technical glitches and system downtimes during peak trading periods have undermined the overall efficiency gains anticipated from the platform upgrades. Additionally, the rapid evolution of global forex markets means that the platform must be continuously updated to remain competitive, posing ongoing challenges in maintenance and scalability (Eze, 2023).
Furthermore, customer adaptability to the new platform features has been uneven. Some users report difficulties in navigating the enhanced interface and utilizing the advanced functionalities, which can lead to increased transaction errors and additional costs. The bank’s current support and training initiatives have not fully bridged this gap, resulting in suboptimal usage of the new system. This study seeks to identify these operational challenges and evaluate their impact on transaction costs, thereby providing recommendations for further enhancements and user support strategies to optimize platform performance (Olu, 2024).
Objectives of the Study
• To evaluate the impact of forex trading platform enhancements on transaction costs.
• To identify operational challenges affecting the efficiency of the new platform.
• To recommend strategies for optimizing platform performance and reducing costs.
Research Questions
• How do forex trading platform enhancements affect transaction costs at Accord Microfinance Bank?
• What technical challenges hinder the optimal performance of the upgraded platform?
• How can customer training and support improve the effective utilization of new platform features?
Research Hypotheses
• H₁: Enhancements to the forex trading platform significantly reduce transaction costs.
• H₂: Technical integration issues negatively impact the cost efficiency of forex transactions.
• H₃: Improved customer support and training enhance the effective use of the platform.
Scope and Limitations of the Study
This study focuses on Accord Microfinance Bank’s forex trading platform and its impact on transaction costs. Limitations include potential data discrepancies across channels and the rapidly evolving nature of global forex markets.
Definitions of Terms
• Forex Trading Platform: A digital system used for executing currency exchange transactions.
• Transaction Costs: Expenses incurred in the process of executing financial transactions.
• Real-Time Data Analytics: The immediate processing of market data to inform decision-making.
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