Most binary options brokers have to operate their businesses in an increasingly tightening environment. Authorities in many countries have a tendency to oppose binary options businesses, however there is not only a financial aspect to this.
The media attention and subsequent scrutiny has been obviously drawn by the increase of regulatory measures, which create a complicated image for the binary options industry as a whole.
To date, the industry has already witnessed a significant crash of the binary options pioneer Banc De Binary, which was forced to close its operation by Israeli authorities.
Others regulated brokers who choose to scramble should be ready to face the financial penalties, such as in the case of OptionBit whose parent company Novox Capital had to meet the €175,000 fine for multiple violations of their CySEC license.
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Such events create a negative attitude towards the binary options industry. For example, it causes an array of difficulties with processing through compliance procedure of PSPs, because most of them tighten their requirements. Operating under European license became a game without margin for error, in light CySEC restricts its requirements.
Operating under European license became a game without margin for error
Plan B
Meanwhile there's an entire well-established industry nearby that is well regulated and remains relatively stable. The forex scene may be not booming as thunderously as it was during its early days, however the current situation with FX proves that it continues to be highly viable. And what's most important is that the market is still there and open for new players.
Switching from binary to FX? a look at Xcritical's platform
Due to its specifics, forex faces less obstacles in terms of regulations and licensing. The industry has already been through the period of outlaw adolescence and grew up to comfortably exist under common rules.
Most authorities that oppose binary options at the moment do allow forex brokers to operate within the country, such as in the case of Israel, Canada and many other places. As such, there's no surprise that the exodus from binary options to forex has officially begun.
Is FX a Viable Replacement?
Yes, binary options and forex contracts are completely different financial instruments – nevertheless, the business operations in these fields are almost identical. As a straightforward example, any Binary broker is supposed to run sales, retention, marketing and financial departments. These departments are also operated in a similar way within a forex business.
The similarity between forex and binary options brokers is also evident in the technology stack. In both cases, CRM, trading platforms, marketing platforms, email automation tools, etc are needed. The same service providers are used in both types of operations, like PSP and VOIP, etc. This all causes a shift of global interests for many binary brokers who seek to migrate their businesses to more stable and predictable forex vertical.
When the binary options industry was at its peak, a lot of forex companies opened binary branches in their desire for a prominent market. Today, the situation has reversed as binary brokers now seek shelter within the forex industry, which is not being hit by toxic news and events each day.
How to Make the Transition
In practice, the transition of an established binary business into a forex area requires a certain effort. The good news is that the transition can be completed within 1.5 to 2 months to completely shift the operation.
The first step of this transition is straightforward: the binary broker needs to build a new website, open a new company and sign agreements with the service providers which could be done very swiftly.
There's no surprise that the exodus from binary options to forex has officially begun
However the most important step is choosing right Trading Platform and CRM technology. A newborn forex brand requires a set of interconnected technical solutions. Therefore for the swift shift of operation it is highly preferable to collaborate with providers who maintain a complete list of services and its full support.
A strong example of fully integrated service provider is XCritical. XCritical is inline with the growing trend amongst brokers to provide all necessary tools and content in one location.
XCritical boasts a number of large well-known brands that make use of its platform, and includes many advantages compared to other trading systems that maximize broker’s productivity and profitability. Traders can buy and sell any asset from one blazing fast HTML5 platform which is fully integrated with the XCritical CRM system.
Combination of intuitive HTML5 trading platform with power of full blown specialized CRM allows for both improved user experience for the trader and optimized workflow for the broker. Brokers that utilize MT4 platform can also enjoy the power of XCritical CRM and streamline the operations of their marketing, sales, retention, finance and compliance teams.
XCritical understands the gap between forex and binary option operations, that's why it also provides dealing and Liquidity solutions as well as comprehensive consulting for any situations that may arise during the transition, which normally takes from 1.5 to 2 month. XCritical is ready to support any binary broker which aims to shift it's operation to forex.
Nobody can clearly predict the future of the binary industry and what would be upcoming regulatory changes. It's now time for binary brokers to mitigate the risks and offer forex trading to their customers. XCritical is ready to support this transition.
Oleg Lax,
XCritical
This article was written by Oleg Lax, VP Business Development at XCritical. For more details please contact olegl@xcritical.com
