We're only two months in 2020, and already a lot has happened in the foreign exchange (forex) industry. Brexit , Coronavirus, and regulatory changes have all made their mark, and the remainder of the year is set to be just as eventful.
One company that is thriving during this ever-changing landscape is Spotware, a provider of online trading platforms and applications for brokers, which aim to convert and retain clients. The company's flagship platform is cTrader, which is one of the most prominent FX and CFD trading platforms in the industry.
Finance Magnates only recently sat down with Alexander Geralis, Business Development Manager at Spotware, at the beginning of this year, but with so many changes already having taken place in 2020, we've caught back up with Geralis to hear more from the company.
Brexit transition period provides some clarity
Specifically, when we last spoke with Spotware, they revealed their plans to make cTrader more available in the United Kingdom. In light of this, we asked what the company expects for the industry in the UK over the 11-month Brexit transition period.
"The fact that FCA brokers now have a full year ahead lightens the load. Where there was uncertainty, we now have some clarification. It is difficult to know exactly how brokers will be able to commercially operate after this period but either way, I expect them to be ready to segregate UK operations if and when needed," Geralis told Finance Magnates.
"This also brings up an interesting question for the spread betting which is UK-specific. A lot of these platforms are proprietary and the costs to create and launch them can be burdening. The need for an efficient ready solution for the small or startup broker is evident."
The rise of start-up brokers
Speaking on the small or start-up broker, when we last spoke with Spotware, Geralis explained that more start-up brokers had been entering into the FX space exclusively using the cTrader platform in 2019, so we asked if he expects this to continue into 2020.
"Yes, we certainly do see this continuing. In fact, we are pleased to have welcomed a few new brokers to the cTrader family in January. While there is a large established broker joining us, it is safe to say the startup trend remains strong," Geralis explained.
With more and more start-up brokers utilizing the cTrader platform, how has this influenced Spotware's offering? According to Geralis, it hasn't had much of an impact, as the company was ahead of the curve, and planned for such an inevitability.
"The truth is we were more ahead of the curve. Early on, our founder started with a scalable commercial solution both in terms of costs and management capabilities without the burden of massive upfront costs irrelative of if the broker succeeds to scale or not."
"Today we see that PaaS type of models are the norm and even in retail, we are used to paying for subscriptions whether it be for Microsoft Word or Netflix. So in terms of changing our offering, while we continue to invest in and develop our solutions to the benefit of new and existing brokers, our commercial model remains unchanged."
Brokers are becoming more demanding
Nonetheless, with brokers becoming more demanding, Spotware has been continuously developing and expanding its product offering. Only recently, the company partnered with Autochartist to provide its market analysis on cTrader Mobile and allow its clients to make more informed investment decisions. Similar industry partnerships like this constantly build and expand the cTrader offering.
"We like to have a strong line of communication both with our brokers and traders using cTrader so that we can get a good amount of feedback. For traders, it is the newly launched cTrader Official telegram chat and the longstanding ctrader.com forum. Every so often we take a look at what is requested and then consider the development and potential benefits in functionality."
"It's safe to say that things like an intuitive economic event calendar and signals or analysis tools are already a standard. If you're not offering them, there is another broker who is and traders are expecting those tools included in their account."
cTrader also supports established brokers
However, cTrader and Spotware don't just cater to start-up brokers, so we asked if there are some more specific ways cTrader is catering to mid-sized or established brokers?
"We've seen more brokers take advantage of our Open API which can be used for various creative solutions that the brokers can build on. You've recently spoken with Skilling which is a perfect example of this."
"By utilising cTrader's Open API they have created a seamless trading experience and integration with their own interface. While this requires some development and a strong technical team on the broker's side, it shows what kind of possibilities we make available."
Commission-free trading race
Across the world, more and more brokers are jumping on the commission-free trading race, with the competition particularly heating up in the United States. In 2019 Spotware removed commissions from its copy trading services.
Commenting on the trend, Geralis said: "Touching on zero-fees, 2019 was an interesting year. Especially in the United States, we saw some large brokers either lowered their commissions or dropped them completely. I think we're only going to keep seeing lower fees for the retail trader. If we zoom-out, this has been happening for a while now. Not long ago brokers could get away with charging $15 just to enter a trade. Can we go back to those kinds of charges…? I think not."
Looking to the future
Although it feels like a lot has already happened in 2020, we still are at the beginning of the year. One trend which is expected to only further dominate the FX space is the importance of mobile trading. Because of this, we asked Spotware what it has in store for its mobile offering.
"We're working on something special for cTrader mobile as we speak. Building off the idea of a more catered journey which we successfully worked on for Web and PC in 2019, we are expanding this on all interfaces but with great attention to mobile."
"You're working with a limited amount of space, how do you add value to a trader's actions and information in the app without distracting him from his Risk Management and trading decisions? This is a challenge we're excited to undertake. "
