On September 23rd, 2022, Apple removed two popular front-end trading platforms from its App Store. Despite being widely used by traders and the systems themselves forming the backbone of a significant number of retail brokers, the deletion happened without warning, ripping the platforms and their functionalities from the App Store. While the reasons for Apple’s actions are still unclear, the fragility of brokers’ dependence on third-party technology has become obvious.
The platforms in question, MT4 and MT5, are front-end trading platforms that provide access to forex and CFD markets, including stocks, commodities and futures. For a long time, these platforms gave traders an easy gateway into markets and, for brokers, offered convenient bolt-on trading capabilities that became central to their operations; their removal from the mobile app store has therefore come as a shock to the industry. It severed smaller brokers’ access to key markets while larger brokers using MT4/MT5 technology had their functionality and market access cut.
In a world of countless vendor-based solutions ready to plug gaps, disruption is temporary, but questions linger over whether other third-party solutions used to fill the cracks could succumb to the same fate as MT4/MT5. The primary problem is, therefore, not in the inconvenience, but rather the reputational impact on firms reliant on these platforms. This episode has also revealed to traders that many platforms rely on the same technology and that, perhaps, their secret sauce is not so secret after all.
A Necessary Wakeup Call?
Despite being a nasty shock for many, the App Store debacle has a silver lining in that it has triggered a race for solutions and pushed firms to re-think their technology and their offerings, a move that will benefit brokers and their clients in the long-term. Mobile trading is a kingmaker among retail trading platforms as typically the most popular mode of trading, shoring up these platforms is, therefore, essential.
The shock has led to serious discussions across retail broking boardrooms on how to reduce dependence on unreliable third parties and regain control of their platforms, allowing them to differentiate and take control of their innovation. The result has been a surge in requests for Progressive Web Applications (PWA) from small brokers wanting to restore functionality and larger brokers looking to take greater control of their technology stack. Rather than being acquired through the App Store, PWAs exist online using common web technologies including HTML, CSS, JavaScript and WebAssembly.
PWAs directly address the App Store issue as they are not beholden to the whims of online marketplaces and are fully controllable by the broker. PWAs have long been a pillar of most modern web tools. While they are not new, modern PWAs are sophisticated and offer a wide range of advantages, including a less burdensome set of regulatory obligations and greater flexibility for change in response to market demand. The independence and flexibility of PWAs, paired with modern development technology, the ability to plug into broad pools of liquidity and modern interface design means that they are a natural solution.
“Out of Adversity Comes Opportunity”
Benjamin Franklin’s famous adage rings true for firms hit by the MT4/MT5 deletion. They have the opportunity to take a broader look at their mobile operations, review their offering and think about what makes them different. In addition, despite the glitzy exteriors of retail broking apps, if under the bonnet the same technology powers all platforms, then there is little incentive for clients to choose their product as their platform of choice.
The retail trading market is fiercely competitive – clients of course want a reliable platform not prone to outages, but also functionality and accessibility they can’t get elsewhere. PWAs and platforms built in an open way will allow firms to consider and choose which elements of their stack they would like to own themselves to boost resilience but also to differentiate their platform. While building a bespoke tech stack might seem like a big undertaking, modern approaches to accelerated development significantly speed up time-to-market and mitigate delivery risk. These recent events also show the long-term prize is certainly worth the effort.
The MT4/MT5 issue has forced platforms to look in the mirror. The situation has raised fundamental questions beyond the simple replacement of select functionality – but shoring up the foundations on which they are built while taking back control of the speed of innovation and being able to respond faster than the market. Rather than being a thorn in the industry's side, the short-term headache could be the industry’s long-term gain as it shifts its perspective on the technology on which it is built.
Amanda Harrison is a Senior Sales Executive at Adaptive Financial Consulting
