Safe and Sound: Technology Tips on Business Continuity for Brokers

7 min read

Market crashes, a pandemic, wars, sanctions, rogue companies, and cancel culture have damaged many brokerage businesses over the past few years. Each event hit differently, with varying force. This means intervention to mitigate their impact is vital to saving your business.

Regulators require a brokerage to have a business continuity plan (BCP). A well-thought-out BCP goes a long way to building a resilient environment. As a technology vendor, we’ll provide insights on how you can ensure you have uninterrupted and sound operations.

All-Around Backup of Trading Solutions

During disruptions, brokerages must be able to continue trading and serving their clients. BCPs are designed to ensure brokerages have backup facilities and equipment to use when an emergency strikes.

Most FX brokers offer customers trading platforms from a single technology vendor that has been on the market for years. The platform may be great, but if the broker fails to have a backup plan for when this software is down, the situation may take a bad turn.

In September 2022, the software vendor mentioned above was canceled by Apple. Due to a rogue brokerage working with the vendor, the App Store removed two popular trading apps.

Unfortunately, the vendor offers its brokers a singular multi-tenant app. Thus, all brokers immediately lost a chance to offer their traders iOS mobile trading apps. Considering that a growing number of traders use mobile apps exclusively, this might cause heavy losses.

We offer two solutions to avoid such risks.

  1. Get a private page on App Store

Get an independent trading mobile app on App Store and Google Play. It might be more expensive, but it’s worth it. No rogue broker can affect your business if you separate it from apps with collective responsibility.

  1. Diversify platform options

Get a second full-fledged platform from another vendor to double down your business resilience. If one platform goes down, you can reroute traders to another.

Facing a Bigger Problem

A lack of updates can make trading solutions obsolete. In April 2022, one of the most popular desktop trading platforms became unavailable for macOS users. It’s a 32-bit application, and the latest versions of macOS Monterey and Big Sur seized the support of 32-bit apps. Of course, there were workarounds like emulation software, but only devoted traders were willing to use these. Luckily, this issue was recently fixed by the platform’s developers.

The other concern is that Apple’s monopoly allows them to decide what to keep or remove (or stop supporting). The good news is that there’s a solution to this “gatekeeping” (as Pavel Durov calls it): web trading platforms.

The current software market offers brokers many web trading platforms for any budget. Some web trading platforms, such as our DXtrade, offer an adaptive UI to replace native mobile apps in case the latter becomes unavailable. Of course, having just one web trading platform isn’t ideal either—it could get DDoSed or be unavailable due to maintenance or configuration errors. 

Besides diversifying an offering with a second platform, cheaper backup options could solve this problem. One of the best is getting custom workaround software, so it satisfies all demands specific to your particular business.

We’ve recently worked with a client who needed a solution for business continuity when their proprietary trading platform was unavailable due to maintenance. See how we approached this challenge here.

If this solution seems excessive, brokerages typically have phone trading available. Clients use it to close positions, cancel pending orders, or have trades placed on their behalf.

Some tools also help mitigate risks if traders can’t access desktop and mobile apps. Messenger apps can be a source of resilience, too. At Devexperts, we have Devexa.

What’s good about a chatbot?

  1. Harder to DDoS
  2. Shielded by Meta or Telegram
  3. Plugged right into trading servers.

A chatbot enables business continuity without placing an extra load on the broker’s dealing desk and support team. Including a chatbot in a BCP is one of the quickest ways to ensure trading remains uninterrupted. It might also help brokers avoid litigation resulting from losses incurred during terminal downtimes.

Guarding Business Operations at All Costs

To further protect business operations, brokers should buy out the source code of their trading platforms. Some vendors offer this option, as we do. Thus, a business will become more independent of third parties, although it must maintain the solution in-house. Depending on your business needs and budget, you can get a turnkey trading platform (like our DXtrade) or a custom one.

More Diversification

Regulators preach diversification of market data and liquidity providers. Working with more than one LP requires special technology, which increases expenses, so it’s not a requirement but a suggestion from regulators.

Sidenote: If you’re running an FX brokerage and want to learn more about the mechanics of FX execution with multiple LPs and the technology behind it, click here.

Our subsidiary, dxFeed, is a market data vendor. They also recommend that brokers check market data vendors’ infrastructure. Minimum latency and maximum resilience must be the priority. At the same time, you should consider whether your vendors’ locations are adapted to sanctions and trade-war footing. Diverse geography with carefully selected locations ensures no geopolitical risks.

Data Backup

The benefits of diverse geography work the same way for your trading and backup servers. Brokers should define data backup requirements so that the necessary data is available during normal operations and after a disaster strikes. This may include having redundant data centers that are geographically dispersed to reduce the risk of loss due to natural disasters that may cause significant damage to an entire region or city. That’s how we set up backup servers for our DXtrade clients.

Wrapping Up

Capital markets largely depend on global events, and brokers must adjust to ever-changing conditions. Building a safety net might seem like costly overkill, but brokerages must maintain continuous operation. After all, it’s not only about what happens during a crisis but also what comes next when it’s over.