There are always new trends, new directions, and ‘hot topics’. The constant evolution – and in some cases revolution – is one of the factors that makes electronic trading an exciting business. It’s this constant pursuit of what is possible that ensures that our industry remains a haven for enthusiasts.
Some hot topics are out and proud in the media and on the stages of global conferences, therefore form part of the thought processes that create the need for evolution, but some hot topics discussed on a one-to-one basis are at the forefront of concerns among brokerages, but are somehow less publicized.
The latter of these conceals a very big change that is currently in progress. A major turning point has been reached within the electronic brokerage industry, and brokers are, in large numbers, moving away from the ‘one size fits all’ trading platforms and investing their efforts toward figuring out how to create greater value by having less restrictive infrastructure.
At TraderEvolution Global, we are at the cutting edge of this changing direction for many brokerages to the extent that a substantial number of electronic trading companies are choosing the TraderEvolution back end as the core trading engine with which to power the entire operational functionality of their business.
Brokerages that have stuck vehemently to legacy platforms are often met with restrictions which are so significant that many firms are now looking at their infrastructure from the ground up, and TraderEvolution’s platform is a powerful focal point of such interest. Tolerance of a less than ideal status quo and any associated acquiescence are no longer so abundant.
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TraderEvolution’s back end trading system is the key component which is being implemented by an increasing number of brokers, and there are a number of very clear reasons for this, a few of which are:
- Growth into new global markets, new product ranges and asset classes including US equities, listed futures, options and fixed income, all on the same platform and same account as OTC CFD products.
2) On-site deployment of the back end, giving the brokerage or financial services firm full control over their entire system and all data.
3) The ability for companies to issue white label solutions with confidence
4) Commercial autonomy: Being able to build forward without reaching a ‘glass ceiling’ or face arbitrary restrictions on products and services imposed by third parties.
5) Being able to issue mobile applications directly. The broker is the publisher, meaning that the value of the business is expandable.
6) Dedicated Client API for integrating in-house or third-party frontends. Many brokers are moving away from the brand insecurity which comes from having the same generic platform as everyone else, and more recently quite a few brokers have developed their own front end trading platform or mobile application and would need a comprehensive back end from which to operate in-house or third party trading apps.
7) The ability to integrate third-party tools and services, allowing for a more comprehensive and interconnected trading ecosystem.
8) The flexibility to offer any front end trading platform interface or any mobile interface, including in-house interfaces or third party solutions.
9) By adopting more advanced technology, brokers can offer products that can stand them out in a crowded market and potentially attract more clients, such as fractional share trading, for example.
10) As brokers grow, they need systems that can handle increased trading volumes and user bases without compromising performance or being subjected to restrictions on number of licenses.
11) Many brokerages have a keen interest in being on trading view, as well as being able to tap into TradingView’s vast network of traders. TraderEvolution has helped a number of brokerages achieve this through the TradingView Broker Integration solution, as well as have the TradingView chart library on their platform. In addition, it is entirely possible to have the TradingView Trading Platform as a front end interface, using TraderEvolution’s back end to operate the trading functionality.
12) Many financial institutions value TraderEvolution’s commitment toward elimination of any possible conflict of interest. TraderEvolution’s back end is deployed onto the broker’s servers and is capitalized via a fixed monthly license fee. All data and all brokerage intellectual property is controlled by the broker, not their vendor.
Companies across the financial markets spectrum from Asia, Europe, South Africa and the Middle East, ranging from banks which offer a genuine multi-asset trading environment to their retail banking clients and well established retail electronic brokerages right through to hedge funds and more recently proprietary trading firms have implemented the TraderEvolution back end to serve as the core of their infrastructure, with TraderEvolution resolving many of these matters for them in order to empower their business on an ongoing basis.
TraderEvolution was developed and built as a multi-asset platform from the outset, and with the back end trading engine as the core trading engine from which brokerages can operate every aspect of their business. Being able to connect to multiple venues, and offer listed derivatives on the same platform and within the same account as OTC products without the need for any middleware such as bridge technologies is intrinsic to brokerages selecting the TraderEvolution platform.
You invested in your business.. Why allow a third party to curtail it?
For those wondering why some brokerages, even relatively large ones with enough commercial stability and time in business to be able to invest in their infrastructure for the long term, have not done so and remain at the mercy of generic platform providers, it appears that patience is beginning to wear thin. Recent catalysts have been the restriction of white label services by one of the platform vendors which affected their ability to continue to extend B2B services to their customers, and the removal of the mobile application from mobile application marketplaces.
Both of these events highlighted the risks of brokerages not being in direct control of the intellectual property and would have presented serious contractual consequences for brokers – especially those offering white label services – as they would have stopped, with their ‘issuer’ being unable to do anything to reinstate them.
A deluge of brokerages have turned to TraderEvolution in order to resolve this matter and ensure that no such external entity can have any detrimental influence on their business. Additionally, consultancies and companies providing ancillary services to brokerages have approached TraderEvolution in order that they can recommend to their clients that the TraderEvoluton back end trading engine can replace existing providers due to an increase in complaints from brokerages to such consultancies relating to the curtailing of services by generic platform service providers.
The TraderEvolution back end core trading engine has a vast array of ready-to-go integrations with various financial entities, including liquidity brokers, banks, prime brokerages and exchanges. This wide range of connectivity options allows brokers to seamlessly connect to multiple liquidity sources and trading venues simultaneously, providing flexibility in allocating different user groups to specific venues.
Designed from the outset for multi-asset trading rather than a modified compromise
With regard to operational capabilities when brokers choose to work with executing venues in order to offer listed products to their customers as part of the move toward multi-asset trading that has been en vogue over recent times, TraderEvolution’s highly comprehensive back end includes specific functionality such as ‘corporate actions’ functionality which allows brokers and financial institutions to manage various corporate events that affect listed securities and their holders.
TraderEvolution’s corporate actions functionality, which includes information relating to dividends, stock splits, mergers and acquisitions and rights issues helps brokers and financial institutions efficiently manage the complex processes associated with corporate events, ensuring accurate updates to instruments, positions, and client accounts. This level of sophisticated functionality is important when providing a genuine multi-asset and multi-market environment to traders.
Because of functionality such as this, brokerages wishing to expand their product range into a multi-asset product range have found that having a core system which was designed from the outset to handle multi-asset trading in a comprehensive manner is key to their operational requirements.
TraderEvolution’s sophisticated order routing capabilities allow pending orders to be triggered locally or sent to external venues, providing brokers with greater control over order execution.
The inclusion of a drop copy mechanism further enhances the system’s comprehensive functionality, as trade events can be fed to other systems.
These are some examples of the essential features required by brokers with a genuine multi-asset product range. There have been some attempts to adapt generic front-end-first platforms to work with multi-asset product ranges, but most platforms that were never designed to operate outside the CFD range are missing important functionality. FIrms often select TraderEvolution so that there is no array of fragmented technology trying to amend a CFD system, and so that all of the necessary functionality is built in, making it a seamless experience with one back end and multiple asset classes on multiple venues as well as OTC products on one platform and one account.
Brokers taking this approach can avoid the race to the bottom which is lead generation for CFD products, which is costly and often results in small first time deposits and low customer lifetime values by introducing customers to different and more sustainable asset classes such as US-listed futures or equities, without them having to have separate brokerage accounts or learn a new platform.
Less platforms, more scope!
Using a generic platform means having to accept one of two compromises.
- Having to keep offering the same products via the same legacy interface even when new trends come about or the trading world moves onto new products or interacts differently with the markets.
- Having to ‘reinvent the wheel’ by starting again from scratch when deciding to offer different products or services to brokerages.
Recently, TraderEvolution’s back end was implemented by a large South-East Asian listed futures brokerage. This broker, primarily engaged in futures trading and offering a comprehensive trading environment to retail customers within its domestic market, has untl now provided two separate platforms: one is the company’s proprietary system for futures trading, and the other is dedicated to OTC CFD trading. Implementing TraderEvolution’s back end means that over the longer term, all of these products can be operated from one core trading platform, reducing the cost and operational fragmentation for the firm.
In Europe, similar requirements have been demonstrated by brokers and in some cases TraderEvolution’s back end has been viewed by such brokers as a means of rationalizing their business by reducing dependence on four to five separate platforms down to just one core platform to handle all products, all manner of front ends or mobile devices, all asset classes and all differences in global markets.
By having a solution which is deployed onto the server of the broker that can handle multiple interfaces, asset classes and global markets from just one back end, brokers can future-proof themselves as well as foster far greater efficiency than operating a series of fragmented legacy systems
Now, more than ever, brokers are taking control of their own destiny.
