Because of the market instability caused by the COVID19 epidemic, more individuals are engaging in retail trading. Many well-known retail brokers have seen a large increase in trading activity across stocks, FX, CFDs, cryptocurrencies, and other markets.
As technology prices have decreased and entrance hurdles have decreased, this highly competitive market has gotten even more congested during the last decade. As brokers fight for the attention of this new breed of trader, they must be able to set themselves apart from the competition by offering a full high-tech trading solution.
Although few brokers would acknowledge it, this does pose a problem for them. The retail broking industry has become very commoditized. Because legacy technology dominates most of the current retail broker market, interfaces and user experiences are frequently identical regardless of which broker is utilized.
The time is right for a fintech revolution in this business. In recent years, we’ve seen new entrants use contemporary, inventive, and adaptable technology to challenge incumbents in a variety of industries, including banking, payments, and even online news & culture.
Challenger brokers recognize that incumbent players are encumbered by legacy technology and struggle to distinguish their market proposition in the internet trading arena. A contemporary solution that combines the effectiveness of an off-the-shelf solution among several other features of a customized trading system might be the answer.
Tackling legacy systems
Online merchants are well aware that they are hampered by antiquated systems with major technological gaps. They’ve turned to off-the-shelf technological platforms to solve the problem. In principle, the present platforms are reasonable, but in fact, they might cause difficulties over time.
To make these platforms operate properly, a large number of third-party suppliers are needed to fill in the gaps in technology. This covers anything from easy plugins for dealers for managing swaps and margin levels to bridges that provide STP trading on platforms that aren’t designed for certain business models. The perks of the innovations and the developments are visible, however, it should be also noted that they require specific knowledge about their use. The platform, software, or system requires the understanding of their tools, for example, a thorough understanding of the difference between cTrader vs MetaTrader is vital for the future trading process as the whole trade is dependent on the correct chosen technique for your trading plan or strategy.
Stacking technological systems and plugins on top of one another increases complexity, raises costs, and compromises operational reliability. When one of the machine’s cogs breaks down, the ripple effect may be devastating. Furthermore, most brokers refuse to acknowledge that the risk management mechanisms built into older platforms are frequently pushed to their limits. Platforms that are available off-the-shelf have a position in the market. They are unrivaled in terms of broker efficiency. On the other hand, the market has been dominated by off-the-shelf goods until now are not equipped to handle the current levels of order flow and client intake. There is a need for a smart solution in the market, and fintech should try to provide it.
Growing and retaining clients at a rapid pace
Brokers are striving to establish themselves as the go-to middleman as internet trading grows in popularity. However, time is of the essence: they only have a limited window of opportunity to win over new consumers and increase market share in a competitive industry. In the case of bigger brokers, this usually entails devoting a major portion of their marketing resources to large-scale advertising campaigns. While this may appear to be a victory in the near term, the underlying legacy concerns may go unresolved.
Off-the-shelf trading systems provide a legitimate and rapid route to market for new entrants or smaller brokers looking to serve their consumers swiftly and effectively. Many vendors can get their platform up and operate in a matter of days after signing the deal. While this is definitely advantageous in terms of speed, the incumbent platforms lack the distinctiveness that is required and frequently falls short in terms of current functionality. As a result, traders have a limited number of brokers to select from, all of whom use the same technology. There hasn’t been a significant shift in the status quo.
Using the most up-to-date fintech skills to provide customized solutions
There’s a third option. Many current systems make use of fintech businesses’ customized and agile solutions, which allow challengers and start-ups to achieve considerable market share. This surge has taught us that not only are people welcoming innovations but also that technology suppliers must package their products in a way that provides value for money and maximum competency while attracting clients.
The retail trading industry has been screaming out for innovation, and the advent of new fintech means that brokers may set themselves apart from the competition by combining off-the-shelf speed and efficiency with a unique and configurable trading system. Off-the-shelf systems offer an unrivaled level of efficiency, but they are in desperate need of updating. We’ve seen how important user experience is in other markets. Providers that can swiftly adapt to changing consumer and client needs are emerging as winners, bringing substance to the table in addition to a beautiful interface.
It’s time to challenge incumbent platform providers’ market domination and move forward with solutions that cater to the demands of the technologically savvy new breed of trader. A forward-thinking trader wants to employ the most up-to-date technologies, which can only be done if brokers provide a user-friendly, secure, and efficient trading platform.
