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Traditionally, FX brokers have offered traders access to their products via a single platform. Our Head of OTC Products, Jon Light, provided his perspective as a guest panelist at the 2024 iFX EXPO LATAM. Jon shared how the model is rapidly evolving, with firms increasingly switching to a multi-platform approach.
Devexperts has seen a big movement from brokers over the past two years from having one platform to a multi-platform approach where they offer traders access over two, three, or even four platforms. Brokers are really looking to use different platforms and diversify how they access the market.
The wakeup call
The shift began in September 2022, when MetaTrader’s MT4 and MT5 apps were suddenly pulled from Apple’s App Store. Since these apps had dominated the retail FX brokerage market, this was a wake-up call for firms that relied on a single platform to access retail FX traders. Jon commented, “Brokers got worried when the MetaTrader apps got taken from the Apple Store because, for a lot of them, it was their only option for mobile trading.”
MetaTrader returned to the App Store in March 2023. However, with new rules, restricting prop trading firms’ ability to “grey-label” through brokers; this inadvertently rendered it unprecedentedly difficult for brokers to access the services, further highlighting the need for a multi-platform approach.
Regulatory changes
A further motivation for brokers to switch to a multi-platform strategy is global regulators’ increasing focus on retail FX trading. For example, in May 2023, the US Commodities and Futures Trading Commission issued an advisory note on forex brokers’ use of white-label partners. Three months later, the same regulator took action against an FX prop trading firm over its treatment of retail traders.
“Last year, we saw regulators get a lot stricter on white labels and also with prop firms. As a result, lots of brokers are looking to mitigate potential regulatory risk by using multiple platforms,” Jon explained.
Catering to the preferences of varied trader segments
According to Jon, an additional driver towards a multi-platform approach is the ability to attract different trader segments. For example, crypto traders are increasingly expanding their portfolios into FX asset classes and want to do so without switching to an unfamiliar environment.
Similarly, TradingView has a huge user base, with traders accustomed to their popular charting layouts and functionality. A multi-platform approach allows brokers to provide unique services to different segments, catering to their preferences.
Over the past three years, Devexperts has been onboarding lots of clients that started their trading journey on crypto but who are now looking to trade different asset types. These traders are used to platforms such as Binance and Bybit and now they’re starting to trade other asset classes, and they want the same UX that they’re used to.
Technological developments
The final factor driving brokers’ switch to a multi-platform approach, according to Jon, is the recent evolution of the relevant technology. Formerly, it was onerous for brokers in the retail forex sector to run multiple platforms. But, with the increasing numbers of bridges and LP hubs that can support multiple platforms, this has become a much more viable option.
Brokers can net off all their positions via one central point, making a more efficient use of firms’ risk capital. “This enables brokers to run their risk in one place,” Jon explained. “It means they can run their B book, set up all of their pricing, and can control execution, all via a single access point. The ability to net into one place is really important.”
Financial considerations
Many brokers are focused on cost control in the current economic climate and may be hesitant to invest in additional platforms. However, according to Jon, opting for a multi-platform approach is well worth the initial outlay.
“Diversifying by adding platforms is not going to reduce a brokerage’s costs, but will really increase its revenues,” said Jon.
Next steps
As Jon noted, FX brokers can access all kinds of users via a multi-platform approach. Devexperts partnered with TradingView at the start of 2024, and Light recommends that all FX brokers establish a presence on the platform so that they can reach its immense user base.
“If you’re a regulated broker, it’s an absolute no-brainer to be on TradingView. There are 60 million people logging into the platform, and they can all see your firm’s name and trade its products.”If you’re ready to add a new platform to your forex brokerage, Devexperts is here to help.
Contact us to explore how Devexperts can take your business to the next level!
