Most entrepreneurs assume that starting a brokerage is going to be staggeringly expensive. While that certainly can be true, it depends on your approach. There is a way to start a forex brokerage that does not cost the earth.
The process is not convoluted or shrouded in mystery, nor is it only available to a select few. It is relatively straightforward.
Here is a short guide to help you start a forex brokerage the right way.
The answer is to opt to partner with a white label provider. White labelling is the process of one company offering its products and services to another who can then use and market those products and services as if they were their own.
Let us take Popcorn Technology, a London based fintech company as an example. They have developed all the systems needed to run a forex brokerage. For a fee, you can use their systems, add your logo to them and sell them to your customers. Your customers will never know. The primary benefit being that these systems are refined, market-tested and bug-free.
Using white label services this way essentially leaves you to run your business and focus solely on providing best in class service to your clients. The rest of it has been taken care of for you.
Most brokerages entering the market do not have years of experience to boast to its customers. That alone can put your brokerage at a significant disadvantage. Most customers are cautious when it comes to doing business with an unknown entity. One way a start-up can counter this is by providing recognised tools, professional tools that their mainstream competitors are using. If a brokerage makes use of a white label mt4 platform, for instance, it can reassure its customers that they intend to operate similarly to its rivals. It will go a little way to persuading the customer that you know what you are doing.
Back Office and CRM
A quality brokerage is a sum of all its parts and does not rely on its trading platform. A key component is an online back office system that empowers clients to manage their accounts and affords brokerages with the power to monitor its clients effectively.
There are not too many trading platforms to choose from, but there are plenty of CRM and back-office tools on the market. Most of them are designed for other applications and are not fit for purpose when used in a forex brokerage environment. Again, you could choose to create your own, but it is expensive to test and develop these systems and ensure they integrate with third-party software. White label CRM’s are cheap alternatives that are designed for one purpose.
Preserving capital is probably one of the most critical factors in the long-term success of any start-up, and it is imperative when starting a new forex business. Ensure that you make smart choices and partner with a white label provider that has the relevant experience helping start-ups survive and thrive in the industry.