GAIN Capital’s Past, Present & Future; an Interview With Muhammad Rasoul

After a 16 year career at Forex broker GFT, industry veteran Muhammad Rasoul recently moved on to become the CPO at GAIN Capital. Forex Magnates met up with Rasoul to learn what led him to move from Michigan’s GFT to New York, what he hopes to accomplish at GAIN Capital, and to discuss plans for the future. While the interview focused and Rasoul and GAIN Capital’s multi-asset approach for the future, it also shifted to interesting thoughts about the forex industry. We learned things like Rasoul’s thoughts about mobile trading, and his approach to creating new products.

With so many topics being discussed during the interview, the Q&A below represents segments of the overall meeting, with plans of publishing more segments as parts of overall industry discussions in the future.

What was it that caused you to leave the firm that you were at for 16 years, and what do you see as differences for you between the two companies?

Sometimes when you do the same thing for so long, you get comfortable doing what you are doing, but it’s important to start doing different things to fire up your brain. Coming to GAIN, I’m obviously in an operational role but am also part of the executive team that manages corporate strategy and M&A. It’s intellectually challenging, but enjoyable.

One of the differences that I noticed immediately is the pace here. Things moved quickly at GFT, particularly for a West Michigan firm, but at GAIN it’s even a quicker pace. Part of that is being in NYC, as well as being a public company. There is a different sense of urgency than you have at private company.

Also, culturally, GAIN still has an entrepreneurial attitude, but it’s also quite mature in many ways – probably due to its venture backing over the years and now, of course, being a public company. The executive team at GAIN is very proactive about using M&A to pursue growth opportunities, and it’s one of the reasons I decided to make the move. This is an inflection point for our industry, and acquisitions & partnerships must be part of a company’s strategy. It’s all on the table at GAIN and opportunities are being actively pursued.

The position of CPO was a newly formed position at GAIN Capital, how were your current responsibilities being conducted at GAIN?

The responsibilities of the Chief Product Officer at GAIN were previously spread across a variety of business units and staff, predominantly comprising the key executive team, IT leadership, and trading and marketing staff. This new role allows one person to plot a course for the organization and collaborate with all key internal stakeholders by assuming the oversight and responsibility of providing the vision for future products. GAIN recognized that this combination of focus and accountability combined with collaboration is critical for our success. My broad skill set and deep industry experience has given me a soft landing here at GAIN and, although I am only a few months in, I feel right at home. My goal is to keep the organization unified around where we are going with product development and innovation, and most importantly to keep up our focus in those areas so that we can see measurable results. Additionally, being responsible to CEO Glenn Stevens for both our GTX business and partnership business in retail allows me to align product development with GAIN’s three pillars – direct retail, indirect retail, and institutional business.

How is your new CPO position different than your role in GFT? What about this role made you decide that it was a challenge you wanted to undertake to start at a new company?

My role at GFT was very similar but with more of a day-to-day tactical element in many areas. GFT’s product portfolio is very similar to GAIN’s. Most of the broader business at GFT was under my remit and since most of the broader business oversaw the product portfolio, I was product-oriented by default. I feel I am able to better utilize my skills here given the organizational structure of GAIN. Here I am able to have an impact across all areas of the business but do not own the tactical day-to-day in the operational groups, which enables me to focus on product and business development more heavily day-to-day. This was a major factor for me in my decision to join GAIN.

As the CPO, how do you make sure your sales and support staff is educated about new products and where do new ideas come from?

First of all, we make them use new products on a daily basis. We’ll have trading competitions and open sessions on using the product. We also ask questions when we are designing new products to listen to their opinions. It’s about bringing them into the product development cycle. One of the things that gets sacrificed with new products is “where do you get your input from?” This means, learning what the demand in the market is. Most firms do a decent job of looking outside; having research firms, seeing trends, and looking at what competitors are doing. But you also have to spend your time within your own organization talking to people on the trading desks and in sales that are talking to thousands of people on a daily basis. You can then mix this internal and external input and generate what can be successful. The underlining tone you need to have is listening a lot. People at GAIN keep hearing from me words like collaboration, communication, inclusion.

What was being done well at GAIN before you arrived?

We do a fantastic job of offering great service, great products, and premium execution. Research shows that FOREX.com is the most recognized brand in the market and by looking into the direct channel for business development I don’t think you can find a firm that has better brand recognition. For future retail business development, that is critical. This firm is built on providing a premium trading experience for our customers and the trading experience that our customers have gotten used to for both MT4 and our proprietary platforms is superior to what I have seen in the market.

What areas are you trying to improve?

It is imperative that we continue to educate the global customer base about the advantages of our products and services - everything from the benefits of our GTX ECN and execution desk on the institutional side to why they should be trading with FOREX.com for Meta. – Also, the importance of speed and quality of execution. I think many traders are still not as concerned as they should be about execution quality. Many traders gravitate to the lowest possible spread but don’t realize that they’re getting bad fills. Or they get sucked in by the hyperbole of the non-dealing desk brokers – which in reality just costs more in spread, without any evidence that quality of execution is better – or even as good as -- market makers like ourselves. We work hard to provide traders with not only competitive spreads but high quality executions – consistently. We go out of our way to be highly transparent about our execution quality through our monthly scorecard and are constantly working to improve our results. FXCM’s recent announcement that they’re introducing a market making model proves that the majority of traders do care more about spreads than NDD execution and that the NDD model is not competitive spread wise. We now need to shift the conversation to execution quality and educate traders on its importance.

What are your thoughts on the Open eCry acquisition?

I am excited about the acquisition as it’s an important part of our core corporate strategy moving forward which is to diversify our revenue mix. The futures space has become depressed, meaning that for many years there were a few firms that dominated where people were putting their money with. But it’s become more difficult for a futures only firm to sustain itself and be profitable. This has led to about 5 or 6 years of consolidation. So I see it as an opportunity for us to come to a mature market and offer OTC FX. Not just in the US, but in many markets.

Will there be a lot of cross selling and which direction?

If you look at the active traders segment, the message of (trading different products) bodes well for them. I see the lines between exchange traded and OTC blurring in future. Also, the OEC active Trading Platform can handle multi assets. You can trade OTC and exchange traded products from one interface. We want to be a company that can provide a variety of markets to a variety of needs. If you look at where we are growing and what our direction is, it is to be multi-asset.

As a general question, what is your view on Mobile trading? Are you seeing any indication of an emergence of Mobile only traders? And can a trader actually be successful by trading that way?

FOREX.com has invested quite a bit in developing our mobile trading solutions over the past several years and we now have apps for iPhone, android and iPad available in multiple languages. Right now it’s definitely a competitive advantage for us, and we’re seeing strong take up from our customers. In Q2 of this year, close to 20% of our active customers traded on a mobile device, representing 11% of our total retail volume.

When I think of a future state of trading, specifically, I see a single application with functionality will change depending on the screen and resolution of the display, hardware that it’s plugged into, the input/output mechanisms available of the device, etc. I see a day when my mobile app is my tablet application is my desktop application -- all the same. If that’s a portable app that is constantly in sync and resides in the cloud or hardware that is robust enough to handle the load of everything from contact management to robust spreadsheet applications, I am not sure – but it’s the future one way or another.

Are there any new products that GAIN will be offering soon?

We have a new CFD offering launching in the 3rd quarter that will introduce a new platform as well as increase the number of CFD’s we offer from a few dozen to several hundred. We have an exciting product roadmap for our CFD offering and will be introducing new markets and new tools over the coming year. We also have an initiative to integrate exchange traded futures into all our platforms, following our acquisition of online futures broker Open eCry.

As mentioned before, we believe that futures are a natural fit with our existing forex offering, and we think that offering these products side by side will be another strong differentiator for us down the road, especially in markets like the US where CFD trading is not allowed due to regulation. Additionally we have been experimenting with some new tools that we hope to make available before year end to help customers make smarter trading decisions. We do this now, but we have some nice ideas on how we can differentiate from other offerings