Part 1: Picking a Platform
In the following 4-part series, we’ll provide you with an overview of the key parts of a Forex/CFD brokerage, how they fit together and what you need to know if you’re interested in starting your own online brokerage business. In the following article, we’ll be looking at one of the most important components of any brokerage, the trading platform. So, let’s dive right in!
Besides your website, your trading platform is the most important client-facing piece of technology you have. A solid trading platform will keep your clients trading with you and encourage them to explore other asset classes. It’s the interface they’ll be spending most of their time on after signing up, getting verified and funding their accounts.
As a newcomer to the space, platform selection can be a confusing process. Do you go for the tried and tested solutions, or develop your own? Do you opt for in-house, or outsource the project to a development firm? Below we’ll break these options down for you and highlight how we can offer a helping hand as your new business gets off the ground.
In-house / outsourced development: This is not for the faint of heart. Developing your own trading platform from scratch, whether in-house or outsourced, is a highly challenging and resource-intensive endeavour, both in terms of time and capital. It requires significant industry experience for you to know exactly what your business requires, and a great deal of technical expertise to get it right. For these reasons, this method is generally not advised for all but the most experienced of brokers.
Outsourcing to an experienced FinTech firm solves the problem of having to hire and manage an in-house development team. It allows you to leave this vital piece of your trading infrastructure in the hands of professional developers. The downside is that this can also be very expensive and extremely time-consuming.
Platform providers: Over the years, a number of platform providers have emerged to solve this problem for online brokers. They’ve developed off-the-shelf platforms that are available for a variable license fee that depends on how many thousands of users you’ll be serving. This has been one of the most popular solutions in the online FX/CFD industry, with MetaQuotes being by far the most popular and widely recognised platform provider in the space.
The downside for newcomers to the industry is that full server licences are costly, and MetaQuotes no longer offers the MT4 platform to new brokers (it continues to support it for existing clients). Also, with this option you will still have to source your own liquidity provider and purchase all the other required components separately, such as client area, CRM, dealer plugins, PAMM services and more.
White Label / Turnkey solutions
The most popular option for newcomers to the industry is a white label solution. This is when a broker or other firm in possession of a full MetaQuotes server licence allows your brokerage to use it with your own company branding in return for a revenue share deal. The advantage of white label solutions is that they usually come packaged with liquidity provision, so you don’t have to source this separately. Some white label providers will also offer you the complete brokerage technology stack, including client area, CRM, dealer plugins and PAMM solutions, so you can get started right away.
Panda Trading Systems
For the best part of two decades, Panda Trading Systems has been developing turnkey solutions for brokers, empowering them to enter the competitive world of online brokerage quickly, easily and affordably. As you make your way through this 4-part series and learn more about what’s required, you’ll see that we have everything you need to start your own FX/CFD brokerage from scratch in 30 days or fewer. From a complete brokerage technology stack, to data feeds, PSP relationships and affiliate/IB connections.
On the platform front, whether you want to offer your clients MT4, MT5, or our own PandaTrader trading system, you can run whatever back-end you wish and still enjoy our great iOS/Android apps and our own web-based Panda WebTrader, all of which sync perfectly the back-end of your choice.
Join us for Part 2, where we’ll be looking at the different departments of an online brokerage.
Alternatively, you can get in touch with one of our success managers right away for a more personal tour of what we have to offer.
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