The financial markets have always been dynamic making the ever-changing role of
forex brokers
Forex Brokers
A foreign exchange or forex broker represents any venue that can provide traders with access to a platform, enabling the buying and selling of multiple currencies.Forex brokers are a key component of the retail forex industry, which have grown to become a sizable and mature industry in recent years. This includes an expansion to nearly every major jurisdiction, which in turn has been met with new regulatory oversight to police the sector.Retail traders can rely on forex brokers for leveraged trading in a 24-hour-a-day market.Retail forex brokers are a rather small portion of the greater forex market, when measured against the institutional sector.Why All Forex Brokers Are Not EqualLike any industry, forex brokers vary across the board in terms of offering, customer service, and terms.Most commonly, differences include trading platforms, currency pairs supported, leverage, and spreads, among other attributes. Most forex brokers outside the United States also offer contracts-for-difference (CFDs) and exposure to commodities such as precious metals. The most commonly supported trading platforms used by forex brokers at the time of writing include MetaTrader 4 (MT4) and MetaTrader 5 (MT5).Given growing competition in the sector and a desire for more client retention, forex brokers have also strengthened their educational offerings and customer service gains. This has taken the shape of online portals designed to promote optimal forex trading techniques.In addition, forex brokers now regularly offer free webinars, encyclopedias, trading tools, and other techniques have helped educate retail traders, many of which lose money trading forex historically.Forex brokers are located around the world but are bound by their service offerings in many instances. In many jurisdictions, these brokers require licenses from regulatory authorities to trade forex.Over the past few years, retail brokers have dealt with a wide range of challenges that has redefined the playing field.This includes new regulation, leverage restrictions, compliance costs, payment processing challenges, and more.
A foreign exchange or forex broker represents any venue that can provide traders with access to a platform, enabling the buying and selling of multiple currencies.Forex brokers are a key component of the retail forex industry, which have grown to become a sizable and mature industry in recent years. This includes an expansion to nearly every major jurisdiction, which in turn has been met with new regulatory oversight to police the sector.Retail traders can rely on forex brokers for leveraged trading in a 24-hour-a-day market.Retail forex brokers are a rather small portion of the greater forex market, when measured against the institutional sector.Why All Forex Brokers Are Not EqualLike any industry, forex brokers vary across the board in terms of offering, customer service, and terms.Most commonly, differences include trading platforms, currency pairs supported, leverage, and spreads, among other attributes. Most forex brokers outside the United States also offer contracts-for-difference (CFDs) and exposure to commodities such as precious metals. The most commonly supported trading platforms used by forex brokers at the time of writing include MetaTrader 4 (MT4) and MetaTrader 5 (MT5).Given growing competition in the sector and a desire for more client retention, forex brokers have also strengthened their educational offerings and customer service gains. This has taken the shape of online portals designed to promote optimal forex trading techniques.In addition, forex brokers now regularly offer free webinars, encyclopedias, trading tools, and other techniques have helped educate retail traders, many of which lose money trading forex historically.Forex brokers are located around the world but are bound by their service offerings in many instances. In many jurisdictions, these brokers require licenses from regulatory authorities to trade forex.Over the past few years, retail brokers have dealt with a wide range of challenges that has redefined the playing field.This includes new regulation, leverage restrictions, compliance costs, payment processing challenges, and more.
Read this Term complex and challenging. Needless to say the last couple of years have seen momentous change in the industry. With high inflation and tightening monetary policies of central banks around the world, 2022 is shaping up to be another demanding year for brokers.
The last two years have also seen a surge in
retail trading
Retail Trading
Retail trading can be classified as trading relegated to individuals through a brokerage service or platform. This can include both beginner and experienced traders, and has reflected a growing segment of the industry.Overall, trading is divided into two designations, i.e. retail and institutional. Retail trading most commonly involves the investing of forex, commodities, and stocks, though can include any asset such as cryptos, etc.Retail trading notably differs from institutional trading, which include investment banks such as JP Morgan or Citibank and central banks like the US Federal Reserve and the European Central Bank. Each asset differs in the size of its retail and institutional markets. For example, retail forex trading is a small piece of the broader market where individuals speculate on the exchange rate between different currencies. At the time of writing, the combined institutional and retail forex market exceeds 7 billion dollars in daily activity, with retail only constituting a small part of this.Signs of a Growing Retail Trading Sector The past few decades have seen a strong growth in the retail trading sector.This has led to the development and harnessing of electronic trading platforms and the internet, which have collectively allowed individual traders to access the global currency markets. Individual retail traders have comparable access to the same trades as central banks and online financial institutions, more so than ever before.Consequently, the retail forex trading industry continues to grow every day with the implementation of new trading platforms in tandem with more seamless accessibility.Retail traders also rely on brokerage services who provide access to markets in the form of comprehensive trading platforms. The most popular of these platforms are the MetaTrader 4 (MT4) and MetaTrader 5 (MT5), which offer access to trading forex, stocks, contracts-for-difference (CFDs), and other assets.
Retail trading can be classified as trading relegated to individuals through a brokerage service or platform. This can include both beginner and experienced traders, and has reflected a growing segment of the industry.Overall, trading is divided into two designations, i.e. retail and institutional. Retail trading most commonly involves the investing of forex, commodities, and stocks, though can include any asset such as cryptos, etc.Retail trading notably differs from institutional trading, which include investment banks such as JP Morgan or Citibank and central banks like the US Federal Reserve and the European Central Bank. Each asset differs in the size of its retail and institutional markets. For example, retail forex trading is a small piece of the broader market where individuals speculate on the exchange rate between different currencies. At the time of writing, the combined institutional and retail forex market exceeds 7 billion dollars in daily activity, with retail only constituting a small part of this.Signs of a Growing Retail Trading Sector The past few decades have seen a strong growth in the retail trading sector.This has led to the development and harnessing of electronic trading platforms and the internet, which have collectively allowed individual traders to access the global currency markets. Individual retail traders have comparable access to the same trades as central banks and online financial institutions, more so than ever before.Consequently, the retail forex trading industry continues to grow every day with the implementation of new trading platforms in tandem with more seamless accessibility.Retail traders also rely on brokerage services who provide access to markets in the form of comprehensive trading platforms. The most popular of these platforms are the MetaTrader 4 (MT4) and MetaTrader 5 (MT5), which offer access to trading forex, stocks, contracts-for-difference (CFDs), and other assets.
Read this Term with a huge number of new investors entering the markets and experienced ones raising their trading volumes. A survey revealed that 66% of these new investors were under the age of 45. Their reasons for trading included planning for retirement or taking advantage of the volatility in the market with a small entry amount.
The influx of traders only increased the competitiveness in the industry worldwide. Brokers now not only need to offer them diverse assets and the most advanced technologies for trading, they also need to cater to the the high expectations of millennial and Gen Z traders.
This makes the choice of service provider to partner with even more critical to the success of retail brokers.
AIRSOFT Technology with its all-in-one technology solution, solves some of the most pressing onboarding challenges for brokers.
Extensive Customisation of the CRM System
The Customer Relationship Management platform is at the centre of all onboarding efforts for brokers. As a broker expands into multiple jurisdictions and different business models, these changes need to be reflected on the CRM. They face the challenge of customising the system, depending on the target jurisdictions.
For starters, strict regulations and compliance protocols by global regulatory bodies mean different limits to leveraged trading, varied KYC requirements, and a list of prohibited assets for trading, based on the country involved. It is now crucial for brokers to maintain documents and records of compliance with regulatory bodies. This requires powerful back-office tools.
Customisation is not only restricted to compliance. The CRM needs to be user-friendly and accessible, which is possible when it has multi-lingual capabilities. If brokers lack such a system, it will result in a subpar onboarding funnel, leading to lower conversions. Some other desirable features of a robust CRM solution include powerful security management and tools to manage access rights.
AIRSOFT offers comprehensive software solutions and end-to-end consulting services for the financial sector. Experts at the company have been associated with the industry for close to two decades, which gives them a unique insight into the arena. It also enables them to design the most customised and compliant offerings for both start-ups and established brokers.
Set up a meeting and free demo with an AIRSOFT expert at the iFX EXPO Dubai 22-24 February at Super Booth #34.
Advanced Technology and Infrastructure for Automation
Intelligent solutions that simplify client onboarding are one of the top trends in the capital markets, reveals a 2020 Capgemini survey. Accessibility and ease of use are some of the biggest advantages of automated platforms.
These platforms enable brokers to eliminate time and energy-intensive tasks, such as KYC, lead management, IB management, while offering extensive visibility. This frees brokers up to focus on enhancing clients’ trading experience, new trading technologies, and more to ensure client retention.
AIRSOFT helps brokers increase their efficiency with integrated solutions like multi-level IB programs, dedicated support and project manager, integrated VOIP solutions, and integrated banking solutions.
Multiple Stable Payment Methods for Clients
The pandemic has accelerated the shift towards digital payments, and this shift has highlighted the need for brokers to update and differentiate their offerings. Friction in deposits and withdrawals can lead to inefficient client onboarding, and often loss of potential clients. It can also lead to an increase in the time taken to onboard, and high operational costs.
Bank accounts are hard to open and designated client funds accounts take a ton of paperwork, certifications, and compliance, based on the jurisdiction. This makes payments a challenging issue from the legal perspective.
PSPs can be unregulated, and their networks can suffer from downtime, without warning, leading to loss of funds. To ensure compliance, credibility, and client retention, it is important for brokers to offer reliable and alternative payment methods, so that transactions are smooth and secure.
Integrating each PSP in a CRM is a tedious process, which involves wasting precious time and resources in developing and testing, ultimately leading to loss of clients. Unless there is a development team dedicated to payment integrations full-time, this is a counter-productive effort.
AIRSOFT offers integrated PSP solutions through its partnerships with leading PSPs, cashiers, and exchanges, so that traders in any part of the world can easily deposit and withdraw funds. The company can further integrate with any leading PSP, as per broker demand through flexible APIs. All this results in increased operational efficiency for the broker, along with access to tools that enable enhanced trading experiences.
Apart from intelligent onboarding solutions, AIRSOFT helps brokerage firms in their expansion efforts through dynamic business consulting services, website development, and referrals to industry experts. It is a one-stop ecosystem for all broker needs.
Sneak Peek into 2022
To help keep their clients at the forefront of the forex broker space, AIRSOFT will be launching a fully integrated MT5 solution. AIRSOFT will obtain the full MT5 license with unlimited features saving their brokers money, time and lengthy procedures. Brokers will be able to instantly offer their clients a branded experience on one of the most popular trading platforms for both web and mobile (iOS and Android). Watch this space to find out more.
Meet us at iFX EXPO Dubai 22-24 February, 2022
The AIRSOFT team will be exhibiting their leading-edge technology solutions for brokers at Booth #34 at the iFX Expo. Book a one-on-one meeting with one of our experts to discuss a tailored solution for your brokerage.
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