Choosing the right binary options platform is a multiple stage decision. Making the wrong choice can be a costly mistake that will not only deprive you of important and much-needed resources for developing your binary business, but may affect your reputation as a brand. To start off, ask yourself the following questions and make a checklist:
1. What Business Model Fits ME?
Currently on the binary option platform market there exists rather diverse business models with their advantages and disadvantages.
a. The volume based or revenue sharing model. This model relies on the growth of your business and scales accordingly.
Advantages: the set-up and initial costs are minimal in most cases.
Disadvantages: you may be putting your client data at risk and the fees will become a burden as your business grows, using up resources you'd rather use for other expenses related to your business. While revenue is shared, your other expenses are not.
b. The license fee and a fixed monthly technical support cost. This model is my personal preference and it is one that is familiar to most Forex
Forex
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi
Read this Term brokers.
Advantages: you are able to project your platform expenses with pinpoint accuracy each month and (depending on the solution) your client data will be your responsibility.
Disadvantages: the initial costs might be more expensive. This model requires a higher initial investment and a very carefully planned long-term business plan since you control the risk.
My answer to this question: I would choose the second model if I am starting a binary brokerage or launching an additional product to my Forex brokerage as it is a long-term investment that does not become a burden on my balance sheet the more my binary business grows. The first model is an adequate choice if your operation is limited and you would prefer to work on white label terms, thus not being responsible 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.
2. Where Will The Platform And My Databases Be Hosted?
In most cases, the platform and your databases are hosted or are linked to the binary option software provider. This is true of any revenue sharing or volume based business models, since they have to calculate their invoices to you, thus they need access to your client data.
My answer to this question: For me it is extremely important that my client data is secure on servers of my own choosing and that I have full control over my product. I worked hard and invested a lot of time and resources into acquiring those clients, it is not in my interest to expose that data and I prefer to hold full responsibility over it in especially in this day and age of malicious cyber criminals. I see very little upside to hosting on the provider's side aside from a relatively small sum saved on servers.
3. How Will My Offering Be Different From My Competitors'?
It's not exactly a secret that most binary option brokers look and feel the same, starting from payout percentages, to the UI of the platform to the offered instruments and binary option types. I feel this might be one of the biggest factors driving away potential brokers away from this business in the first place. Let's break this question down into several parts:
Payouts and instrument settings: This is something that the broker should control, not the platform provider. The very simple reason for this is because controlling the payout percentage is very much the same as controlling the spread on Forex. Brokers are constrained by their platform providers and essentially have a hard time competing with other brokers due to this technical limitation.
The solution: It is very important to choose a platform provider that gives you control over the price feed. After all, you are a broker and the client sees your brand and you should be responsible for pricing you give your clients. This solution allows you to setup any instruments you would like, with your own settings, payout percentages and even time intervals.
The UI: This is the face of your business. This could be a website where your binary offering is integrated into, or this could be a separate web-platform. This is what your clients see and the place where their main interaction with you occurs. This is one of the most important facets of your business, so invest in it. The fact of the matter is, most binary platforms look the same (aside from color) and most providers do not offer enough templates to make yours look unique.
The solution: Ask every provider you are interested in into the capabilities of their API and how deeply you can customize your solution. Even if you cannot afford a dedicated designer at this point in time, you will in the future, and finding out that you cannot customize your “store-front” due to technical or political limitations will put you in a desperate position. The industry will be moving away from fixed templates and you do NOT want to be left behind in this situation.
My answer: To be truly different from your competition, you must have the freedom to be different. This is something you should bring up with any platform provider as it goes beyond just marketing and sales, making the wrong choice could put you at risk of being unable to respond to regulatory changes in a timely manner (https://www.financemagnates.com/executives/insights/binary-options-path-towards-regulatory-status/).
4. How Can My Platform Choice Help Me Attract Customers?
While most of client acquisition will be done through marketing and sales, it is important for your platform to have the infrastructure that will assist in this process.
Trader demo accounts: This is extremely important. It is still rare to find binary brokers who offer demo accounts for traders and usually the limitation is from the software provider. Demo accounts are an excellent way of gathering leads by converting traffic to your website. This practice is standard in the Forex industry and it works. I would make this one of my main factors in choosing a binary platform.
Accessibility: If a potential client cannot access the platform, then he will not be able to trade on it. Most binary platforms are web-based, however, it's important to check your potential platform on multiple browsers. The beauty of web-based platforms is that they can run on virtually any operating system, be it Linux, MacOS, or Windows, provided that the software provider managed to optimize the platform for all of the popular web browsers. It's also important to take note that in this day and age, mobile is a big and growing segment of the internet using population. Therefore, make sure to check whether the platform provider has mobile apps and whether their web-platform is optimized on mobile devices.
My answer: First and foremost make sure that you are able to provide demo accounts to potential clients, then make sure that those clients are able to connect to your solution from, at the very least, the major mobile operating systems and browsers (include Safari, Mac users are a neglected demographic).
In closing, I would like to remind you that the binary options industry is still in its early stages across all segments of the business. There is no go-to solution that every binary broker uses, but it's important to take some lessons from the Forex industry as there are clear parallels. The old saying, “You get what you pay for,” applies heavily in this business. Platform providers advertising extremely fast setup and cheap prices are a poor choice for a serious business looking to carve their name into a developing industry. There aren't currently titans in the binary options industry, so pick a platform that will provide you the freedom and independence to become one. After all, you are investing in building your business, not your software provider's.
Choosing the right binary options platform is a multiple stage decision. Making the wrong choice can be a costly mistake that will not only deprive you of important and much-needed resources for developing your binary business, but may affect your reputation as a brand. To start off, ask yourself the following questions and make a checklist:
1. What Business Model Fits ME?
Currently on the binary option platform market there exists rather diverse business models with their advantages and disadvantages.
a. The volume based or revenue sharing model. This model relies on the growth of your business and scales accordingly.
Advantages: the set-up and initial costs are minimal in most cases.
Disadvantages: you may be putting your client data at risk and the fees will become a burden as your business grows, using up resources you'd rather use for other expenses related to your business. While revenue is shared, your other expenses are not.
b. The license fee and a fixed monthly technical support cost. This model is my personal preference and it is one that is familiar to most Forex
Forex
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi
Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi
Read this Term brokers.
Advantages: you are able to project your platform expenses with pinpoint accuracy each month and (depending on the solution) your client data will be your responsibility.
Disadvantages: the initial costs might be more expensive. This model requires a higher initial investment and a very carefully planned long-term business plan since you control the risk.
My answer to this question: I would choose the second model if I am starting a binary brokerage or launching an additional product to my Forex brokerage as it is a long-term investment that does not become a burden on my balance sheet the more my binary business grows. The first model is an adequate choice if your operation is limited and you would prefer to work on white label terms, thus not being responsible 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.
2. Where Will The Platform And My Databases Be Hosted?
In most cases, the platform and your databases are hosted or are linked to the binary option software provider. This is true of any revenue sharing or volume based business models, since they have to calculate their invoices to you, thus they need access to your client data.
My answer to this question: For me it is extremely important that my client data is secure on servers of my own choosing and that I have full control over my product. I worked hard and invested a lot of time and resources into acquiring those clients, it is not in my interest to expose that data and I prefer to hold full responsibility over it in especially in this day and age of malicious cyber criminals. I see very little upside to hosting on the provider's side aside from a relatively small sum saved on servers.
3. How Will My Offering Be Different From My Competitors'?
It's not exactly a secret that most binary option brokers look and feel the same, starting from payout percentages, to the UI of the platform to the offered instruments and binary option types. I feel this might be one of the biggest factors driving away potential brokers away from this business in the first place. Let's break this question down into several parts:
Payouts and instrument settings: This is something that the broker should control, not the platform provider. The very simple reason for this is because controlling the payout percentage is very much the same as controlling the spread on Forex. Brokers are constrained by their platform providers and essentially have a hard time competing with other brokers due to this technical limitation.
The solution: It is very important to choose a platform provider that gives you control over the price feed. After all, you are a broker and the client sees your brand and you should be responsible for pricing you give your clients. This solution allows you to setup any instruments you would like, with your own settings, payout percentages and even time intervals.
The UI: This is the face of your business. This could be a website where your binary offering is integrated into, or this could be a separate web-platform. This is what your clients see and the place where their main interaction with you occurs. This is one of the most important facets of your business, so invest in it. The fact of the matter is, most binary platforms look the same (aside from color) and most providers do not offer enough templates to make yours look unique.
The solution: Ask every provider you are interested in into the capabilities of their API and how deeply you can customize your solution. Even if you cannot afford a dedicated designer at this point in time, you will in the future, and finding out that you cannot customize your “store-front” due to technical or political limitations will put you in a desperate position. The industry will be moving away from fixed templates and you do NOT want to be left behind in this situation.
My answer: To be truly different from your competition, you must have the freedom to be different. This is something you should bring up with any platform provider as it goes beyond just marketing and sales, making the wrong choice could put you at risk of being unable to respond to regulatory changes in a timely manner (https://www.financemagnates.com/executives/insights/binary-options-path-towards-regulatory-status/).
4. How Can My Platform Choice Help Me Attract Customers?
While most of client acquisition will be done through marketing and sales, it is important for your platform to have the infrastructure that will assist in this process.
Trader demo accounts: This is extremely important. It is still rare to find binary brokers who offer demo accounts for traders and usually the limitation is from the software provider. Demo accounts are an excellent way of gathering leads by converting traffic to your website. This practice is standard in the Forex industry and it works. I would make this one of my main factors in choosing a binary platform.
Accessibility: If a potential client cannot access the platform, then he will not be able to trade on it. Most binary platforms are web-based, however, it's important to check your potential platform on multiple browsers. The beauty of web-based platforms is that they can run on virtually any operating system, be it Linux, MacOS, or Windows, provided that the software provider managed to optimize the platform for all of the popular web browsers. It's also important to take note that in this day and age, mobile is a big and growing segment of the internet using population. Therefore, make sure to check whether the platform provider has mobile apps and whether their web-platform is optimized on mobile devices.
My answer: First and foremost make sure that you are able to provide demo accounts to potential clients, then make sure that those clients are able to connect to your solution from, at the very least, the major mobile operating systems and browsers (include Safari, Mac users are a neglected demographic).
In closing, I would like to remind you that the binary options industry is still in its early stages across all segments of the business. There is no go-to solution that every binary broker uses, but it's important to take some lessons from the Forex industry as there are clear parallels. The old saying, “You get what you pay for,” applies heavily in this business. Platform providers advertising extremely fast setup and cheap prices are a poor choice for a serious business looking to carve their name into a developing industry. There aren't currently titans in the binary options industry, so pick a platform that will provide you the freedom and independence to become one. After all, you are investing in building your business, not your software provider's.
