Once you have decided to start a new Forex brokerage one of the first decisions you will be faced with is whether to build your software and systems from the ground up or to utilize current systems that are available to everyone. Either option is valid but which you choose will inevitably come down to time and money.
A start-up brokerage is a risky business and will require significant investment. It does not seem wise to spend a vast amount of capital on a bespoke trading platform that is unknown and untested, especially if you are new to the industry. Only a few people have the luxury of bottomless pockets, and for those of us that do not there is a much simpler and cost-effective route to market.
That option is to choose a white-label service such as the one offered by Popcorn Technology. To know more please visit here.
What is white labeling?
A technology company should have spent many years developing its own proprietary systems and processes and has created the perfect ecosystem to run a successful start-up forex brokerage. Additionally, they utilise the MT4 trading platform and many other industry-leading applications which are already established and trusted tools used in the industry today.
Software like the one mentioned then allows a new brokerage to repackage these tools and systems as their own. It is an out-of-the-box solution to empower a new brokerage to get off to the best start as cheaply and as quickly as possible while maintaining an independent and professional look.
Why use the MT4 platform?
Initially, most new businesses struggle to attract customers because they are unknown and untrusted, especially in the hyper-competitive market of Forex. Customers are very wary of scams and fraudsters. A new brokerage will need to work hard and represent a strong ethos and provide value to win over prospective clients.
One way to do that is to work with existing tools that traders know and trust already. For example, the MT4 trading platform has been the leading trading software for over a decade. Its success is due in part to its incredible tools and data feeds that enable traders to trade on the markets but also because it is exceptionally robust and reliable.
From the perspective of a new trader, they are much more likely to gravitate toward a new brokerage that looks professional and offers familiar tools.
The components of a successful brokerage
In addition to the trading platform, a start-up brokerage will need a few other systems that work together to create a sustainable business. These components must integrate seamlessly.
One of the most challenging, time-consuming, and expensive things about proprietary software is trying to integrate it with existing tools.
The Trader’s Room is a secure web-based portal built to provide clients with the data and tools they need to manage their accounts while providing the brokerage with practical tools to manage its clients. Under the secure login, clients can register new accounts, read reports, make electronic deposits, and even manage trivial things like system language settings.
A liquidity provider is an institution which behaves as a market maker. It acts at both ends of currency transactions – buying and selling currencies at specific prices. Liquidity providers effectively make the market. Tier one providers will enable lightning-fast execution times to keep costs and slippage to a minimum which provides a better deal for brokerages clients.
An effective CRM is like the beating heart of a brokerage. It enables a broker to track their traders and its own business data in one convenient space. The CRM also facilitates affiliate management, customer call-backs and is the focal point for client communications. For more information about CRM software, visit EngageBay CRM.
Convenient and secure online payments must be a standard feature for a new brokerage these days. Depending on your location and customer base, you may need to provide several solutions.
Support is a significant factor when it comes to maintaining loyal clients and is often an area that is overlooked. To keep customers happy, brokerages need to keep clients informed and rectify complaints as quickly as possible.
An effective affiliate network will need to continually provide new clients to ensure a start-up brokerage can grow and reach its full potential.
Finally, branding is crucial. A good brand represents value and is immediately identifiable among its competitors. The whole purpose of white label services is to allow a brokerage to utilize expert tools as their own to save money and time.
White label services are ideal for start-ups
Making all the above systems function together in a slick and effective manner is no mean feat. I’m sure you can appreciate the investment it would take if you were to start from scratch on all these components, and still, you would have no guarantee that they would work or that potential clients would see the proposed value and use your services over someone else’s. It is a complete gamble.
You should seek someone that offers each of these systems, and they are also white label. So, for a fraction of the cost, you can have a fully-fledged brokerage up and running in a few weeks.
Also, they have cultivated beneficial relationships with liquidity providers and PSP’s, which allows them to pass on the best possible deals to their clients.
This service even has a dedicated start-up team that specializes in helping new Forex brokerages. They are eager and willing to answer all questions regarding what it takes to become a successful brokerage, and by using their white label services, you can make use of this team to steer you in the right direction.
To summarise, the main advantages of white label services are: –
- It will save time. Your brokerage could be up and running within a few short weeks.
- Save money. White label services cost a fraction of what it would if you were to hire an agency to develop the above-mentioned systems.
- Leverage an experienced team. White label services come with customer support.
- Fewer maintenance costs. The brokerage is not responsible for server and infrastructure maintenance fees.
- Proven systems. These systems are currently in use in the real world and are continually updated and improved.
- Brandable. All the above components are brandable to maintain a uniform and professional look.