Exclusive: TigerWit's CEO - It's 'Survival of the Fittest' for EU Brokers

TigerWit is a global forex broker based in the United Kingdom with roots in Asia. Over the past year and a half, the firm has been expanding its footprint - particularly in the European Union. However, this expansion has coincided with a rapidly-changing regulatory environment for brokers with the recent implementation of MiFID II.

We sat down with Tim Hughes, the Chief Executive Officer of TigerWit, to find out more about the company, how it's dealing with the changing regulatory environment in the European Union (EU) and more.

Firstly, can you tell us a bit about TigerWit and your recent developments?

TigerWit is a fintech firm originating out of Asia. Over the last 18 months, we've been expanding the footprint, adding a Bahamas license and then acquiring an entity in the UK with an FCA license. All of that has been preparatory work to then be able to roll out our proposition, which is a Trading Platform that is taking a fresh look at the trading space - particularly retail forex trading. It aims to bring a new experience to the users of this product and to enhance the offering through the implementation of new and emerging technologies.

Specifically what we launched this week, alongside our global trading app is a blockchain-based settlement engine. This essentially allows clients to look up the trades that they've done in an independent third party system in order to verify the trade exists as they originally placed it. The system creates an immutable record that they can look at. So in a nutshell, TigerWit is bringing new and emerging technologies to the industry in order to enhance transparency, improve the trading experience and trustworthiness within the trading space, ultimately leading to a fairer trading environment.

Do you think Blockchain is the answer to the industry’s problems?

Blockchain is a hot topic at the moment, and we see inherent benefits that the technology brings in providing trust and transparency. It has the potential to bring some quite profound benefits to many industries, not just finance. We are well aware of its current limitations with the obvious one in the trading space being the speed with which it can process things. We're used to millisecond latency, and the technology has yet to resolve that. But by design, blockchain allows us to build an application which creates an immutable record and that unequivocal stamp of authority and trust which then can't be changed, meaning we can resolve one of the timeless and nagging concerns in any trading and transaction environment which is “can I trust who I am dealing with”?

Can we expect more product launches from TigerWit?

Absolutely. What we've announced this week is the beginning of a journey. We've launched our blockchain application and announced our exciting Liverpool FC partnership which will give us the platform to get ourselves more widely known. This gives us the ability to talk about what we're doing because we feel there's a real opportunity for us in the market and we want to communicate the message that we are a trustworthy operator with the aim of leveling the playing field for traders.

We've got a long product development roadmap which is going to help us develop in two ways - how can we make the trading experience better for users on smartphones in apps giving them what really they want. We think the industry has basically spent so much time over the last few years dealing with the deluge of regulation, causing distractions and so now there's an opportunity to move things forward in terms of how people trade and invest on their smartphones and how they interact with technology. That's the major drive for us, and we’ve only just started, building from the ground up. At the same time blockchain technology and how it can be deployed, developed and applied in the trading space is the other major focus for us over the coming months and years.

In some respects we're only just beginning this journey and clients of TigerWit can look forward to many more exciting innovations using the latest technologies as we continue in the vein "how can this make things better, fairer, more transparent."

What do you hope to get out of your sponsorship with Liverpool FC?

Liverpool FC is an exceptional club with a global presence - it’s a fantastic time to be partnering with them, especially given they are performing so well at this early stage of the season. They've achieved great things, and we're looking to achieve great things too. We were looking for a partner that will give us an opportunity to talk about what we're doing, to become known by a global audience - and Liverpool absolutely gives us that, particularly in Asia. So there's a great alignment there, and it gives us the opportunity to get our message out there.

TigerWit has recently expanded to the European Union, how are you finding the regulatory environment?

The regulatory changes over the last couple of years have been significant. I think we're in a phase where the new normal is not clear to anyone. The changes are profound, and I believe we're entering into a phase where it's survival of the fittest. I think there will end up being fewer operators in this space. I believe with the approach that we're taking - focusing on the elements that we've been talking about and the end-user, then there's the potential that it will lead to a better experience for clients. But equally, if there are fewer operators, it could mean a poorer experience for clients unless it leads to more operators in this space innovating like we are.

But as with any change, it's a massive disruption in the UK and Europe. There are two things from TigerWit's point of view. As we're a global operator, we can continue to offer the forex product as broadly as it has been for quite a long time now, while seeing how things play out in the UK and Europe. But any seismic change such as this creates opportunity.

There's a theme of work which is around on how we can evolve our offering to address these change and maintain relevance in the UK and European environment, which we have to assume at this point is going to be one defined by much tighter leverage and a much heavier regulatory oversight than we've seen before. The new normal is not yet established, and it's very much "watch this space."

How do you think the leverage restrictions will affect brokers and traders?

It depends which side you look at. As I said, I think it’ll be a survival of the fittest, and there will be fewer brokers offering these services in the future. I can't see any other conclusion when a leverage restriction is applied which by definition reduces the amount of volume that anyone can do. From the client point of view, I have major concerns whether it's actually in the client's interest. I'm not sure the demand was coming from clients. I think more concerning for everyone is that there will be very predictable consequences to this regulatory intervention which are contrary to its stated aims. But as I said, much remains to be seen. My sense is that clients are not thanking the regulator for limiting their ability to trade in a way that they've always wanted to.

One of TigerWit’s recent corporate developments is the investment by Susquehanna Investment Group (SIG). Can you tell us more about this?

This was a key corporate development, a key investment, which we closed earlier this year which brought fresh capital into TigerWit from a very complementary company. SIG is enormously technology focused, deep in the markets, very algorithmic driven, incredibly successful. The investment arm of the group has spun out of a financial operation, who is now very active in VC investment space, using the experience they have and the benefits they can bring to their investee companies to identify fintech firms who have got something different to offer and are going to go somewhere. It is a fantastic endorsement of what we're doing which I think few other brokers can claim. They're a key strategic investor of ours and will be an important partner of ours as we move forward.

Tim, your position at TigerWit sees you returning to the retail investor space - what was is about the company that made you want to join?

What I liked about TigerWit from the very start of becoming involved with the company is how they take a fresh look at the trading space and use these technological elements to disrupt, innovate and to move things forward. Since leaving IG in 2013 I have been involved in a wide variety of projects - quite a number of regulatory aspects - but also working with numerous fintech firms as well and I was looking for the right opportunity to re-engage in the retail trading space.

But I only really wanted to get involved with someone who at its heart wanted to really mix things up and really do things differently. I had a fantastic time at IG; I was there for 13 years during a phenomenal growth phase in which we achieved enormous things. But I think now, what the industry needs and wants is a fresh look, fresh innovation, fresh disruption and I believe that's what TigerWit has always been about.

By my joining them and helping them build a team of experienced professionals around that, we're hoping to strike that right balance of depth of experience with the drive to look again, and re-invent. The "anything is possible" disruption, which personally is very exciting to me, brings together all of the themes that I've been working on throughout my career.