A few years ago, the wave of online trading swept even those who were not deeply involved in the field of finance. Today, everyone from business owners to housewives is trading, and discussions on investment portfolios have become part of any small talk. Last year, Quadcode Markets, an international online trading platform, soft launched in Australia and has plans to hard launch shortly.
The CEO of Quadcode Markets, Australia, Evgeny Tychenko, discussed the challenge of getting an Australian ASIC license, Quadcode Markets platform simplicity and the competitive advantage, why the pandemic has advanced humanity and a new crisis in the spirit of Tulip mania.
How is the Quadcode Markets platform built and what are its special features?
We developed software for trading back in the early 2010s and it looked more modern than MetaTrader. Our clients - both traders and business companies - enjoyed simplicity and a user-friendly experience and stayed with us. A word of caution that simplicity can become a trap – the simpler it is, the lower is the trading entry threshold. This means clients without enough skills in trading have a greater risk of losing money.
But today many brokers position themselves as simple platforms, which can be figured out in a couple of clicks. Is this some kind of a trend?
Yes, usability outweighs fees or charges. Most traders are more likely to choose a simple platform with high commissions than a complex one with low commissions. Simplicity is an important part, in particular for decision-making. In times of market volatility, speed really matters. Quadcode Markets is a platform for fast trading, for high risk trading and, in some sense, for emotions. If you want to test hypotheses and play with your ideas, you can do it on Quadcode Markets platform.
How was the platform created and developed?
We caught the spirit of the times, fit in, and became one of the first to make it "simple and beautiful". We continuously expanded from 2013. When the pandemic hit, there were difficulties – we closed down certain business lines and regional markets but also witnessed expansion and growth.
Apart from usability, what other features of your platform make it competitive on the global market?
Almost everything in trading can be copied today. It is easy to copy the iPhone too, but it is difficult to move it out of its niche. We have managed to occupy our own niche. We always tried to add new features corresponding to the times, remain beautiful, modern, so that users are sure of our reliability. We remain honest and build relationships of trust. During the periods when many brokers pushed their services and sold their platforms as a "tool to make quick money", Quadcode Markets did not promise a quick profit, because statistically not everyone is able to make money on trading. Nowadays, many brokers are gradually coming to the idea of using similar principles.
Can you name any exemplary trading platforms?
I like plus500, Interactive brokers – though they are pretty slow and not so modern, but they have created an aura of reliability around them. Wake me up at night and ask me who I would trust my money to, I would say – Interactive brokers. We would like to adopt expertise from similar platforms.
How many people are there in your team now and where are they located?
Our head office is based in Cyprus and employs about 200 people. We also have offices in Dubai, London, Gibraltar, USA, Australia, Eastern Europe and Malaysia.
What is the future of remote teams – the post-pandemic phenomenon?
The consequence of the pandemic is an interesting topic. Aside from the terrible price we paid in the form of lives lost, the pandemic has greatly advanced the digitalization among the population. Let's look at Cyprus, which had lagged far behind the rest of Europe in its development. E-government, delivery and taxi services appeared here. The pandemic greatly increased the value of personal time. We realized that hours that people spend on their way to work are quite detrimental to national economies, and to human health in general. In the long run, remote work will have a great impact on all. I believe that the pandemic helped to progress our lives 10 years forward. We would not have reached this point so quickly on our own.
What are the Quadcode Markets’ plans?
We have plans to launch a new product that will focus on "slow" and less risky trading. It will be a service for citizens with average and above average income, which will allow them to keep their funds and access them. It will also be fully automated. It's like comparing an old cab service to an Uber – the car is the same, but you don't want to call the operator anymore.
Tell us about some of the company’s philanthropic initiatives, what are they aimed at?
We sponsored schools and universities in Eastern Europe that offer programming courses, hoping that in the future this field of labor market will be filled with a large number of specialists. Now we help schools in Cyprus from time to time. We also patronize a village in Africa providing it with electricity, water, and create infrastructure for living there.
Do you think nowadays it is appropriate to measure the value of a company solely on money, and if not, what criteria do you use to measure value?
Free people work more efficiently. And many companies currently focus their initiatives to be flexible and creative. This increases productivity and profitability. Humanity is simply moving forward, trying to make more and more money. But it's no longer appropriate to talk about it. Modern companies should treat their employees like their children, because they give their best years to the company. Such companies will win in the long run.
In 2018, Australia was ranked as one of the 10 best countries for business according to Forbes Best Countries for Business 2018. Why did you choose Australia for business?
Australia is a tidbit market, which is similar to Europe in terms of regulation, and in general is closer in terms of mentality. Everything we do in Europe is much easier to implement here than, for example, in Japan. Aussies liked our product, but we had to leave until we got a license. And now it's all sorted out. We are also trying to get licenses in London, the United States, Indonesia, and South Africa.
Does the license provide any special "status"?
Once you get ASIC, you become more respectable in the Asian regions, and can easily enter those markets.
To get a license is considered to be a very complicated process, why do you think it is so difficult, and what tips can you share to overcome these difficulties?
Every country tends to make regulations more complicated. The hardest thing to get is a banking license, since it is some way of restricting competition for those who are already well established in the market. If we talk about ASIC, you have to tick all the checkboxes, pay attention to the nuances, and assemble the right team. We organised a local team of specialists who understand the specifics of the Australian market.
Now training in investments and trading is in great demand. Does your company offer an educational platform?
We hold webinars and provide tutorials on how to use the platform. But we don't teach how to invest. The platform can help you to trade, but it cannot instruct you how to trade. As I see it, it's useful to learn how to trade only in practice. People who lose money through brokers get education and experience which cannot be learned from a course. The real-life experience of resilience to losses and risks is a pretty important thing in investing. It's not right when the broker does the training himself. My opinion is that you cannot provide business and teach someone on how to do it at the same time.
Can decentralized financial systems become an alternative to the traditional stock market?
The value of cryptocurrency is still linked to the traditional exchange rate. At the moment, it is nothing more than a derivative and a gambling tool. Yes, cryptocurrency has some useful features but there are a lot of vulnerabilities. Blockchain has a future, and it will certainly be very interesting, but cryptocurrencies are ahead of their time.
Are NFT virtual assets also ahead of their time?
Humanity does not yet understand what a digital asset is, how to own it, and what its value is. So far it's a dream of the future to have some cross-platform stuff in virtual archives, like in the movie "Ready Player One." However, the ease of creating and copying them will tend toward zero. The laws of economics here are a bit broken, since the value of this stuff should also tend toward zero.
Does the Quadcode Markets platform offer an opportunity to add crypto wallets?
You can't buy bitcoin or withdraw it from us, and we don't plan to get such a license yet. Our aim is everything related to trading and money, not owning property - and crypto wallets are about owning property. You can buy a bitcoin index from us, it's much safer.
Why has online trading become so popular in the past few years?
Trading is addictive. During the Tulip mania in Holland, everyone was involved in it and everyone was talking about it. Trading gives emotions. Hype around it pulls people into that funnel. But the world is built in such a way that it first draws you in, then disappoints, and then again goes to a certain curve. I would not recommend you to enter with a bigger amount of money than you are ready to lose.
What is the main problem of classical trading today?
There are old-school traders who learned for a long time and charge a huge fee for it, sitting on Wall Street and wearing suits. And on the other side there are more democratic brokers who offer to buy the indexes and take it easy. As Warren Buffett says, invest in the S&P 500 and sleep well. Actually it does show good results. And the commission is much lower. Today brokerage companies are down to 1% for trades. This business can outfox people from Wall Street. Another problem with trading is the outflow of people into crypto-trading. It's very volatile, and you can make a lot of money with a good bet, just like on horse racing.
What is the mood in the investment market today?
There is a so-called "doomsday clock", which shows three minutes to midnight. The mood in the stock market right now is similar. Inflation, rate hikes, the war in Ukraine, oil prices, continuous growth over the past 10 years – everything indicates that a crisis is about to begin.
What is going to happen with broking in the near future, then?
I hope that the war will be over, oil prices will go down and the market will happily exhale, inflation will decline, and that will be the impetus for a new growth for the next 8-10 years.
According to Forbes - private fintech companies showed record growth in the first half of 2021. There are eight fintech companies in the list of the 20 largest non-public unicorn-companies. What do you think is the reason for such a fintech boom in the world?
Here we can also use the example of the old cab and Uber. People don't want to go to a bank office, make calls, stand in line, and in general communicate with people. And fintech makes that possible today. I think that in the future people will be horrified to remember not only banks, but also ATMs.
And what is the share of the fintech market in Australia? Why is this market interesting?
The share of the Australian market is as follows: 25% of the clients of fintech companies here are usually Australians, and the other 75% are from Asia. This is what makes it interesting. Big States are like IT companies, they create an atmosphere that makes everyone want to join them, not leave them. At least smart states, and Australia is certainly one of them.
Do you believe in the future of globalization in light of current events? Also in the financial sector?
Humanity has benefited greatly from globalization. Look again at the example of Cyprus – its membership in the European Union has greatly advanced the country technologically and economically. But any progress is wavy. Now, after the wave of globalization, we see a kind of rollback. States begin to protect themselves and limit certain things. But in the long run, no country will benefit from this – humanity must strive for "smart" open borders. Any civilization based on closed borders will degenerate. Breakthroughs are born where there is an influx of new people from different places.
What kind of leader does a modern international company need, in order to build business across continents and in different cultural contexts?
The days of strong leaders are over. It is impossible to be the smartest in all areas. If you act like you're the smartest, then why would others stress, take responsibility, and grow? Perhaps this strategy was useful when you needed a single brave man to attack a tiger. Now the leader should not be the smartest one and the bravest, but the most caring one – to gather the team, provide them with comfort and the opportunity to learn. My reference point is Simon Sinek, his ideas are very attractive to me.
