Within the last 30 years, the industry has changed considerably. One ever-present throughout, whose vision and bon vivant style, has cultivated almost legendary status is Tom Higgins, the CEO and Founder of Gold-i. Since its formation in 2008, Gold-i has provided the technology and tools to support hundreds of FX Brokers globally. More recently, Gold-i took the plunge into the world of crypto, a subject Tom himself is a passionate speaker on.
Having rarely been out of the news, legit and fake (more on that later) over the last 12 months, I was appreciative to grab a few minutes of Tom's time to look back on what has been going on with Gold-I over the last year and get his thoughts on the industry overall.
It’s been an exciting last 12 months for you and Gold-i. Lots of partnerships, impressive growth and lots of activity. But, I’d like to start with Crypto Switch™. Its launch made some big waves within the industry and now, after some testing market conditions, what have been its biggest challenges so far?
Crypto Switch™ is Gold-i’s platform for financial institutions wishing to access deep and diverse crypto liquidity, with a fully cleared solution. We launched the first iteration of this product in 2017 and have invested in and evolved it ever since. It’s a very different product now from when we first launched it.
The biggest challenge we’ve faced along the way has been product positioning. We were early-stage crypto advocates and, one of the biggest challenges when producing innovative technology can be finding the right market and the right messaging to gain significant traction. The crypto market is opaque compared to the FX market, and it was harder to find clients than we originally anticipated. However, as digital assets became more mainstream, interest picked up from brokers wishing to offer cryptos as an additional asset class. More recently, we have found significant demand for Crypto Switch™ from fund managers. They are particularly interested in the large ticket sizes they can access through us, our technology infrastructure and the 24/7 support we can provide. It has taken us a while to reach this audience, but this is where the majority of interest is now coming from.
Addressing negativity about the market has also been a challenge. However, I believe that the market is in a stronger, more sustainable position than ever before, particularly as a number of the crypto lending platforms which offered extreme conditions have now folded. The digital asset market has become more mature and is ready to be regulated.
From what we are hearing at industry events and from what we are seeing, i.e. more inbound leads for Crypto Switch™ than ever before, financial institutions are planning ahead and their appetite for offering digital assets to clients continues to grow. A fund, for example, doesn’t just turn on digital assets overnight. It takes about nine months for the full planning and setup stage in larger organisations. Connecting the technology is probably the quickest part of the process. So that’s why business is strong for us now, despite the Crypto Winter. Now is the time for firms to be planning a digital asset strategy – ready to go when the market picks up.
Gold-i recently announced enhanced cryptocurrency liquidity offerings with the addition of Binance, the world’s largest crypto exchange, and liquidity provider number 18 for you. Has client demand been met yet or are institutional demands still pushing for more?
The crypto world is no different to the FX world, where there is always demand for new and curated liquidity for every type of client. This means that we will continue to integrate appropriate liquidity providers and will add more exchanges on demand to give even greater choices to clients.
I understand that Gold-i was recently targeted in some #fakenews scam. Can you talk us through that?
A website called Times Newswire recently published a news story about Gold-i working in partnership with a broker called ASJ Forex Global. This broker is completely unknown to us, and it was alarming to see that, not only were they using Gold-i’s name to validate their business, but they even made up a quote from me endorsing their firm. We have subsequently had a number of calls from their clients, assuming that we have a relationship with them.
We all know there is fake news out there, but you don’t think people are going to completely fabricate stories about your business and use your name too. I wasn’t aware of this level of news scam in our industry before. We tried contacting the site to get the story taken down, but they were impossible to get hold of. This really highlights the importance of getting your news from reputable industry websites.
Does the industry do enough to protect against investing scams? If not, what can it do?
It is incredibly easy for people to get scammed. So much is pushed on social media that is totally invalidated. I can’t see what the industry can do about that other than continue to make investors aware of scam situations. From an investor perspective, always bear in mind that nothing is free; if something sounds too good to be true, it is too good to be true. Never give your money to anyone unless you know that they’re reliable and reputable, and you have checked them out.
In terms of protection against scams, this is where strong regulation comes in. Investor protection is vital, and that’s why there’s so much interest in crypto regulation being introduced.
One thing I have noticed reporting on Gold-i over the last few years is that you are the CEO of a company that very much likes to promote from within. Is this a definite policy and a why?
It’s always been our strategy to recruit talented juniors, train them and promote them from within. Occasionally, we need specific skills or a level of experience that we don’t have in-house at the time. In these situations, we recruit from outside the firm. We’ve benefited a lot from recruiting from outside the industry, too, and training people with transferable skills.
With nearly 30 years in the industry, you have seen it all and done it all (allegedly). What stands out for you as defining changes in liquidity management over those three decades?
I have! I split the 30 years into three distinct decades. During the first decade, there was massive growth in retail FX. There was a huge demand, little regulation, and it was hard to get access to good liquidity as almost everything was B-Booked and warehoused.
During the next decade, the crazy levels of growth became more controlled, but there was still good growth for brokers. Things started to become more professional and retail brokers were able to access liquidity which was pretty close to institutional grade liquidity.
In the third decade, we saw the benefits of strong regulation which stopped out-of-control growth and ridiculously high losses for clients. It’s also been an era of consolidation, particularly in terms of having a smaller number of large retail brokers and LPs. We’ve seen more growth in Asia than in Europe, and cryptos have been widely accepted as an additional asset class, which has really shaken things up. What we are seeing in the crypto industry is similar to what we were seeing at the start of the e-FX industry. However, instead of taking 30 years to mature, the crypto industry will have reached this point within five years or less.
What changes are happening now and what, in your opinion, needs to change?
Regulation is needed in the crypto industry to provide more certainty and validation. Once regulation has been introduced, and I don’t think it’s going to be in the too distant future, the large banks and regulated financial entities will really engage in this space. It will be a game changer.
One of the positive things about the Crypto Winter is that it has made traders aware of the risks. There was a time when making money from cryptos was like having a free lunch. Now, traders realise that it’s a volatile market and are more aware of the risks.
It’s been great to see you speaking at the various iFX and FMLS conferences, which restarted after the pandemic. A back to normality, Is it back to normality for you? Have operations changed as a result of the pandemic? What lessons, good and bad, were learned during these exceptional times?
Nothing is back to normal, but there is a new norm, hybrid working, which is the way we expect the world to work for the foreseeable future. Employees no longer want to work full-time in an office. They like the flexibility of working from home and coming into the office for social contact. The majority of companies who mandate working in the office full-time have struggled to retain employees, and it undoubtedly makes it difficult to recruit if you don’t offer a hybrid solution.
In terms of the good lessons, I think we all learned how resilient both businesses and employees can be. We’ve also learned to be more efficient. Pre-pandemic, you wouldn’t think twice about travelling abroad to try to meet an important potential or existing client. This often took up huge chunks of time. Nowadays, it’s acceptable to have a Zoom call and to meet up only when absolutely necessary.
The pandemic also highlighted the importance of pre-empting situations which can significantly impact business operations. Whilst we could never have predicted the pandemic, we were fully prepared for remote working having introduced snow simulation days to ensure we could operate seamlessly if snow prevented people from coming into the office.
As for bad lessons, I found it was extremely difficult to plan strategically on a Zoom meeting. Board meetings with the management team weren’t the same. I missed brainstorming in person. I also think it’s virtually impossible (excuse the pun!) to develop and maintain a strong company culture if people only ever meet online, and that’s why I don’t think that running a fully remote business is a sustainable option. We have a really diverse group of employees from a wide range of cultures, and I think we learn so much from each other by being together, at least from time to time, and this really helps the business to evolve.
Lastly, after a very exciting last 12 months, and I believe a record 2021, what can we expect next from you Tom?
Having now become more immersed in the institutional crypto liquidity business, we will see increased activity in this market segment. In addition, with risk management being increasingly in demand, we also anticipate continued interest in our risk management and business intelligence tool, Visual Edge. We will also continue to develop our Matrix liquidity management product to support the greater use of hybrid A Book/B Book trading and will integrate more LPs serving the needs of larger clients.
As an industry, I think we will also see greater adoption of cloud hosting as opposed to dedicated hosting, and this is an area that Gold-i can help clients with.
And of course, now that travel has opened up, you can expect to see me travelling around the world, and, of course, sharing my adventures and industry insights along the way!
