Gold-i is a global market leader in trading technology, helping hundreds of multi-asset brokers to transform their trading operations with robust liquidity management solutions, award-winning MetaTrader Plug-ins, business intelligence tools and all with the best support in the industry. Gold-i has won over 20 trade awards in recognition of its innovative products, commercial success and future potential, including a prestigious Queen’s Award for Enterprise 2014. Has been recognised as one of the most influential Fintechs in 2018 and 2019.
The Broker Business in 2020
Held on Wednesday the 10th of June by iFX Expo’s Virtual Vision Finance was the panel ‘Opportunities amid Uncertainties: The Broker Business in 2020’. Directed by Finance Magnates Editor, Celeste Skinner, consisted of Gold-i Founder and CEO Tom Higgins, Peter Plester, Dan Moczulski, Christopher Gore, and Raphael Tetro.
Please enjoy below a more detailed version of Tom’s answers along with some bonus questions. If you have your own questions, please contact us.
The coronavirus pandemic has had an impact on the global economy, and we will continue to see the after-effects of the virus for months to come. The brokerage industry has benefitted from this crisis more than most, with increased market volatility driving volumes and attracting new traders to the markets. However, it has not been without its challenges...
You recently said in an interview with Finance Magnates that although the industry has largely been able to adjust to working from home, many lack the business intelligence tools or dashboards needed to gain a top-line overview of their KPIs in real-time.
Going forward, do you think brokers will increasingly rely on business intelligence tools?
Yes – The Pandemic has shown that you can’t just pop over to someone’s desk and chat about position risks, etc, as you are sitting at home on your own.
An advanced dashboard showing your KPIs is key to be able to monitor where you are from a risk perspective.
Without that face to face communication, it is really difficult to judge the situation. Brokers are running enhanced risk at the moment because of the increased volatility. This has taught brokers that no automated risk management or just relying on Excel just isn’t good enough.
You need something that is designed specifically for your market and has the right metrics in it and that reacts quickly enough to see where you are.
Volatility reached its peak in March, which in turn caused liquidity issues for certain assets, such as gold and oil. How did Gold-i navigate the unprecedented volatility levels?
A good example of this is when the oil futures price went negative.
If you could not monitor your clients and your positions in oil then you could be seriously off-side. Gold-i tests for these types of scenarios, although we never thought this particular one could ever happen!
We have seen a huge increase in inbound leads across our whole product range, but particularly for Visual Edge, our business intelligence tool that shows what is going on in dashboards in real-time.
A trend has emerged where financial institutions are no longer building and maintaining their own systems in-house. Why is this, and do you expect this to continue?
This has been a trend for quite a long time of people not building things in-house because they have realised that whist they can chuck a few developers together, this is not actually building a product. What you will have is a one-off thing that is not supportable, and you need to keep the developers employed to keep the APIs up to date.
Our Matrix liquidity management system, for example, has over 75 liquidity provider integrations that need to be kept up to date all of the time, and these change regularly. This means that it is just not viable for a broker to build all of their technology unless they are going to sell it as it just too expensive to keep the teams going.
What we have seen with Covid-19 is that LPs are much more sensitive about the type of business they will accept, so you don’t get one LP that will take all of the business a broker has.
Different brokers with different asset classes need to be able to access a range of LPs to get a good fit between the broker and the LPs. You can’t just chuck anything at an LP anymore, and they will just accept it so that means that a broker will probably need to have several LPs to cover the different types of clients they serve, from professional to very retail as well as the different asset classes.
A broker will, therefore, end up with a larger number of LP integrations to manage, which is not viable for them to do themselves. We are even seeing banks buying more and more stuff in - in the past they would never do that.
Citibank announced recently that they were going to greatly reduce the number of platforms they use, but focus more on the few that they will continue with. Buy not build is a trend that will continue.
What difficulties have Gold-i clients faced through COVID-19 and what has Gold-i done to support them?
The retail FX broker industry has been very resilient during this crisis and has had to deal with greatly increased volatility and, for a short period, negative oil futures prices.
All brokers have seen a huge increase in the account opening from retail punters to professional money managers with their own set of clients. Gold-i has been there 24/7 to support our clients with liquidity issues and to advise on managing the performance of their systems.
Increased volatility increases the price update-rate and therefore stresses the broker’s network and their trading servers. Some brokers have added additional capacity, upgraded their networks, servers, and added LP cross-connects.
We noticed that brokers stopped innovating for the first part of the lockdown, but are not past that period, and are back to what they do best, doing new and exciting things. In fact, two of our largest projects have just gone live, but more on that later!
Many of your clients note your customer service and support team to be one of your greatest assets. Why do you think this is?
It is often said that you should measure how a partner performs under pressure, or when there is an issue, rather than when all is going smoothly. Gold-i excels in getting to the bottom of customer issues, however complex and time-consuming they are.
Brokers do not want to be the piggy in the middle between liquidity providers, data centres, tech providers, and many, many others.
Gold-i liaises with all the parties to get to the root of the problem so it can be fixed efficiently. Technology is complex and ever-changing, and, because of this, it does not always work as you want it to. This is where you can rely on Gold-i to get it fixed.