This article was written by Jon Light, Head of OTC Platform at Devexperts

A notable change in the way that brokers conduct business nowadays concerns the options they provide when it comes to placing orders. This is part of a more general trend in the industry towards offering a customizable experience and is undoubtedly related to the multiple generational cohorts that trading firms are seeking to attract and retain.

Previously, a one size fits all approach was favored for the sake of convenience, but the ascension of the Millennial generation, and now the coming of age of Gen-Z, have really highlighted the need for variety.

This, however, is more than just a generational issue. Today, consumers of all generations are more demanding and have become much more familiar with tailored products and services. This goes way beyond the ability of traders to customize their platform layouts.

Internally, the trend is also informed by the growing need for increased operational resilience, as well as by how much easier it is to integrate multiple systems nowadays.

The myth of the industry standard

Over the past decade or so, platforms that were formerly regarded as industry standards have come under increasing pressure. Interestingly, this pressure hasn’t just arisen from rival platform providers.

A case in point is the success of TradingView as a charting service, which many business development people initially overlooked. Consequently, there’s now an interest in integrating TradingView charts with brokerage and exchange platforms. In our experience, the most popular methods of doing so are the integration of TradingView charts, or the platform itself, as widgets within other platforms that are flexible enough to receive them.

Alternatively, another method involves integrating the front-end with another trading platform’s back-end, which can be achieved most effectively in cases where the platform in question features a public API, or where a pre-existing integration already exists. Pre-existing integrations mean that the time to market is negligible.

Single platform risk

While the above refers to trader preferences, another important driver of the multi-platform trend is the need for adequate platform redundancies. Financial services firms are recognizing the need to offer alternatives, not just as a marketing exercise, but also, more functionally, as a defense against cases where a platform outage on the provider’s end, or a problematic upgrade, can affect a trading business’s ability to operate.

By offering more than one platform, a brokerage can improve its resilience, while also affording their users more options. This is a prudent defense against worst case scenarios, while also providing a valuable opportunity to gauge the true preferences of customers in a much more realistic way.

Additionally, in today’s rapidly shifting and increasingly competitive market, vendor lock-in is to be avoided at all costs. Many brokers found this out, to their detriment, a few years ago when they had their mobile apps removed from Apple’s app store.

This led to a surge of interest among brokers in creating their own mobile apps, or alternatively, sourcing different front ends that they could own and control. In this market flexibility is crucial, which is why we have always tried to offer as many different solutions as possible rather than just prescribing the one that suits our business best.

The move among many brokers to take control of their mobile offerings was, in some ways, the first step for many trading businesses to start considering wider options in other brokerage technologies.

Improved connectivity

Of course, the multi-platform trend hasn’t developed in a vacuum. In parallel to the requirement for more than one trading platform, we’ve also seen the evolution of other business critical brokerage systems.

For example, the enhancement of LP hubs, making it much easier to integrate multiple platforms, has contributed to the viability of a multi-platform setup by improving the ability of brokers to be able to manage risk all in one place.

Another example of this enhanced connectivity is the ability of modern CRMs to connect to multiple platforms. This is crucial to many brokerage departments, including customer service, sales/retention, back office, and compliance, as it allows important customer data to be consolidated and to inform business decisions in a timely manner.

Trading outside of the box

The emergence of a multitude of app-based trading venues aimed specifically at younger traders has contributed to another seachange that’s currently underway. Trading services provided by firms like Robinhood and neobanks like Revolut are breaking the stranglehold of incumbents in a manner that we feel is great for competition. The market is also fertile for, and conducive to, a great deal of innovation as financial service providers attempt to reach their chosen demographics in new and unexpected ways.

One of the most interesting ways to do so has been via chatbots. The natural language capabilities of these systems have evolved in truly stunning ways in recent years. The manner in which they can now be integrated with a business’s trading architecture has opened up completely novel avenues for traders who can now just type, or even speak, their trading instructions to the bot.

As these systems receive on-going training and are integrated with richer databases, their capabilities are becoming difficult to overlook. Traders can inquire about their accounts, perform market analysis, and provide trading instructions without having to interact with a traditional trading platform at all.

Initially, these systems were just viewed as alternative methods of interaction, often integrated into the trading platform offered by the business in question. Now, though, as the list of integrations expands, traders are able to interact with them via their own preferred applications, such as Facebook Messenger, WhatsApp, Viber, Telegram, Discord, and more.

This development is highly important as users spend most of their screen time on these applications. Integration with them provides a synergistic relationship that, when done right, can increase user engagement in ways that adding yet another icon to your users’ home screens simply can’t match.

Is more really better?

In our opinion, it’s not quite as simple as more being better. As mentioned above, flexibility is the key. So, solutions that preserve flexibility are to be regarded as a priority when sourcing new technologies.

As your offering continues to evolve over time, it’s possible to incorporate more solutions that appeal to a wider range of traders, enhance resilience, and offer both more control and freedom to customize their experience, as well as to own your own technology.

We understand that the customer bases of many brokers do necessitate a business relationship with industry incumbents (for now at least), but a sensitivity to changing trends and to the needs of younger demographics is not to be overlooked. These new traders are the groups who will increasingly take the torch from older ones, and, as we have seen, they’re not necessarily set on one market, asset class, or method of trading.

We don’t advise overwhelming clients with options, but rather, to be intelligent in targeting a range of different trading styles and demographics, while adding valuable redundancy, all in a manner that maintains what has been working well so far, while also keeping a keen eye on the future.

Source: Finance Magnates