A popular business model among technology providers is to develop and sell a trading platform as a universal product. It comes with great benefits for both the vendor and the client: cost, time-to-market, well-recognized and time-tested solution.
The main argument against such universal solutions from the point of view of a broker is clear: no – or too little – differentiation. But there are some implications coming from the product universality that are less obvious.
Customization is often perceived as tinkering at the edges of the platform, e.g. inserting a widget with third-party news feed or recoloring a trading terminal. However, the real value of customization lies down in changing many pieces of a platform to maximize the business impact. Customization is the route to smart marketing campaigns, versute dealing settings, seamless connectivity with liquidity providers, back-office, CRM, KYC and AML systems. A carefully customized platform should offer much more than efficiency and process improvements – it must offer business insight and enhance revenue. Brokers who plan to grow their business simply cannot afford not to level-up their operational efficiency and skittle the extra profits away.
Customer acquisition problem
Most brokers invest heavily in business development. Aggressive competition makes acquiring new traders prohibitively expensive, e.g. the pay-per-click rates for ‘forex’ and ‘spread betting’ keywords are already ridiculously high. But when a broker’s website and a trading platform are disjointed, the number of converted leads can half. Onboarding through a website with a further invitation to launch – or even worse – to download a 3rd-party platform inevitably offers a suboptimal customer experience if the systems are disintegrated. It is crucial to understand how this disintegration occurs and what can be done about it.
A good starting point is to consider the onboarding process from a novice trader’s perspective.
First, the trader is forced to complete a four-steps-many-fields form on a website. Then there is often a need to find a button to download a terminal or be redirected to a web platform. The second obstacle is that the credentials do not work, as they apply solely to the broker’s website cabinet where traders deposit funds. Consequently, to log in to a trading platform, the user is forced to retrieve automatically generated credentials from their inbox. And of course email does not operate in real time so there may be further delays. This case, when onboarding process is done through a system completely segregated from the trading platform, demonstrates how different credentials and different user experience lead to mistakes, frustration and often to a decision to try their luck with a different broker. Every switch between the systems increases the real likelihood of client loss.
Reasons to offer an integrated client experience
A proprietary trading platform that is integrated with the broker’s cabinet simplifies the client acquisition process and improves client retention. Ideally, the first thing the client sees when clicking on “create live account” button is the platform itself. Here, the client can immediately view live quotes and with everything so close, the trader is eager to get started. The only thing to overcome is a compelling window kindly asking to answer some questions imposed by regulators. Here are the handy widgets or pop-ups to help navigate the customer’s journey, while having him concentrated during the whole process.
Removing roadblocks for deposits
Traders watch their positions in the trading platform. There is often a need to immediately top up a balance: e.g., there was a sudden market move or there is a new trading idea. If the systems are disjointed, as it is often the case with off-the-shelf platforms, the trader can lose time and miss the opportunity. If the market moves against the trader, positions may be liquidated or if the market aligns with the trader’s forecast, there will be an opportunity cost if the trade was not placed on time.
A single sign-on solution and bespoke user experience, which would enable fund management and trading through a single application, can improve both deposits and trading volumes – and both are critical to retail FX or SB business.
Although there are many commercial off-the-shelf products available, platform providers cannot always tailor them to a broker’s exact needs. The owners of an off-the-shelf platform evolve the platform the way they see it right, and not according to your, individual broker’s, plans and needs.