Executive Interview: "Thinking Purple" with David Kasper, CEO of Purple Technology

In this week's Executive Interview, Forex Magnates spoke with David Kasper, CEO of Purple Technology, as well as a founder of Axiory, to learn more about the two companies and their MultiTrader platform. Covering the industry, members of Forex Magnates are often asked for references of which firms are offering different types of technology. In recent months, there has been a pick up of interest for money management solutions which provide customization of strategy providers to on-board clients. Possibly fitting that bill, and leading us to want to learn more about their offerings is Purple's MultiTrader copy trading platform which is being aimed at money managers, as well as customers interested in copy trading.

1) How did you come about entering the Forex industry and launching Axiory?

I started with Forex about 7 years ago while I was still a student, trying to find the “holy grail” of financial business through discretionary and automatic trading. However, I have an entrepreneurship soul so I tried to make a business activity out of it.

Me and my colleagues (with whom we work together to this day) started to develop technology for asset management companies on the FX market. We always knew we did not have the years of trading experience to trade by ourselves, so we started up a business that connected the two key parties, investors and experienced traders.

That was the first idea of moving our activities to another level and to create the MultiTrader environment. We knew that if we wish to have a product that really works we needed to have the whole system under control. That means taking care of all the processes starting with choosing the strategy providers, connecting them correctly to the market Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, and ensuring the whole process is built on solid technology. So it made sense to start up an FX broker, strong on the technology side. We decided to get together with people that share the same vision and we founded Axiory.

2) When you launched Axiory, you went live using outsourced products such as the Sirix trader from Leverate but have since developed your platform in-house. Was this your intention all along?

Yes, Axiory started cooperating with Boston Technology in the beginning and then moved to Leverate. From my perspective Leverate has good tools for Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term and we are still cooperating with them. Each of the tech. partners had something to offer us at the stage we were in, but we were always very demanding and evolving quickly on the technology side.

Ever since Axiory was founded, Purple Technology worked closely with Axiory on features that we were not able to get from our technology providers. Tools such as registration procedures with AML and KYC, customer zone, brokerage back office where we automate 80% of everyday procedures, fully integrated MultiTrader in to the client zone and others things that we needed.

I think it is important to have one complex technology solution that works perfectly together. You can't get there when you use too many technological providers. That’s why from the start we always intended to develop full brokerage system for ourselves, one that is developed for the broker, by a broker, based on requests from people inside and outside.

3) What is the status of Purple Technology, is it a B2B broker offering, or connected with the Axiory brokerage?

At this moment Axiory and Purple Technology are two different brands with different business models but using the same technology and customer support.

The Purple technology team was built by passionate people that worked in technology and support for several years. Thanks to good geographical location in Brno, Czech Republic (strategic location of top IT firms such as IBM), the team became stronger so it made sense to create a separate unit for the B2B offering.

4) What do you believe are the most important advantages Purple Technology is delivering to the FX sector?

Our main advantages are innovation, flexibility and a human approach. Innovation – hand in hand with complexity is a key to our success. I think that people are quite lazy but on the other hand people want to be effective and have everything under control. Here I see our advantage – we are innovative and we automate procedures in brokerages and save them time to allow deeper control to their management.

Flexibility - when you decide to go into Forex brokerage industry, in the beginning you can choose from many readymade packages. But after a short time you will need more flexibility, more freedom and it costs so much to get that flexibility in the FX market. We are holding a different approach, we are building our solution to fit every stage of your business without the need to spend tens of thousands USD on technology fees.

Human approach – when we defined what Purple Technology is for the first time, our definition was this one: Purple Technology connects high quality and innovative technology with a human approach. This is our “purple mind”. Our goal is to have only people (in the team) who want to help others and do their job for more than just money. When I am offering our product to a client, my honest intention is to help him in the first place. Money is always result of good business then.

5) Both with Axiory and Purple, you are focusing on providing copy trading products, which is different from other brokers and technology providers. What is your opinion on the future of copy trading and potential regulation may play?

Actually the very first what we were concentrating on was copying trades (Idea of MultiTrader), only then the rest was built upon that. Since this was different from other products, it made sense to make Axiory as well as Purple different as well.

We started with that idea in 2007 when no other such projects were present on the market. A simple solution was enough for that time, and for our use. However, when other big companies who were capitalized with millions of dollars came to compete with us, we needed to perform actions towards a more sophisticated solution and professional business.

I think that the future of copy trading is in performing the actions we have already done. Among the others, it is implementing this technology into the broker technology individually, to make sure it works 100%. Also for example, keeping high quality level of strategy providers selection procedure that is covered by MultiTrader. What is also important for the signal trading is further decreasing the delay between signal provider and investor and its overall promotion in countries where clients do not know of this yet.

Regarding the regulatory environment in EU. I expect it will become stricter and non-licensed subjects will not able to operate there. On the other hand, there are ways to manage this, but the signal providing companies need to be on top of this, otherwise it could ruin their business.

6) Can you explain a little about how one becomes a money manager on your MultiTrader platform, and what benefits would they receive?

Sure, in the first stage of MultiTrader strategy selection there is a due-diligence procedure, which requires to know who is the provider and verify real results of strategy.

Second stage is a real trading test. The strategy provider trades as usual and we measure the latency, execution and other parameters. As each strategy is different, the duration of the process differs based on the number of trades and trading style.

When everything is okay the strategy specialist in the MultiTrader team approves the strategy provider and sets up CapitalGuard level for customer protection. It’s usually from -15% to -35% and we always discuss it with strategy provider.

At the end of this process, the successful strategy provider does not have to do any additional work to get tens of thousands of extra profit from their performance fees, if they are profitable of course.

7) Having developed proprietary products, how was the process and what advice would you give other firms creating their own technology?

From my perspective it is about knowing your customer well, and it does not mean that you need to read thousands of books and do interviews with each customer. The best way how to empirically understand customers is to really be the customer.

Before we built Purple Technology we were in this environment as customers and also built things for ourselves; this helped us provide the best service.

So my advice is to be a user first, understand the needs, possibly be a part of the company that is using the products, only then you may build a really good product for the customer.