First of all, to all our US readers Happy Thanksgiving. Thanks for taking the time to read the site on your day off. To the rest of us, Happy Thursday.
Product launches started early at the Summit with the first event being the Innovation Stage. In total, ten companies either launched new products, or went public in the FX industry for the first time. The stage was divided between five startups and five existing companies presenting. As the products were featured last week, today my goal is to provide my quick thoughts on these new products and the industry value.
Tradimo play: Winning the startup competition was Tradimo play with their coming ‘Become a Trading Here’ game to educate new traders and be offered as a lead generator. The value play here is that if the product comes through as advertised, it will provide a solid lead generator to attracting a younger audience to trading. My view is that a game could also be very useful for sales people as they would be able to focus on prospective leads which were the most engaged with the game app.
Centroid Solutions: They presented a Risk Management software for brokers. While one could argue that they weren’t bringing anything new to the market, they fill an important risk management gap in the industry. Many small to medium-sized brokers rely on end of day Excel reports to monitor their traders, with the MetaTrader Manager offering a poor solution for tracking real-time market making. Centroid is a solution for smaller MT4 brokers who want a cost effective real-time risk management solution.
Exgate: An end-to-end solution for brokers offering Bitcoin trading to customers. Including MT4 white label, liquidity and risk management (I posted a more in-depth review of the product here)
Qubitia: Fitting into the cloud-based trading trend I mentioned on Monday, Qubitia provides a solution for non-programmers to create, backtest, and deploy automated trading strategies. Volumes from automated traders are typically much higher than those of the point and click variety. Therefore, the value for brokers is that Qubitia will make it easier for more customers to adopt systematic trading and increase a firm’s overall volumes.
Normann: Normann was the wild card of all the startups. If the judges had to enter a number two, I would bet Normann’s name would have appeared in that slot across each judging card. Captivating the audience with a very charismatic and energetic presentation, Francis Larson introduced Normann, a trading platform that handles your risk management without traders knowing how small or large their trade size is. The idea being that retail traders are poor at risk management and double down when they should be taking positions and trade too small when they are on a streak. Sounds cool, but here is the question. How would a pilot feel sitting in the cockpit of a drone plane as it takes off and lands without him/her having control?
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Divisa Capital: They launched a Prime Wealth product. As prime of prime broker, this product provides a simple and efficient back-office wealth management solution, for brokers. The main differentiator is the ability to create multi-currency accounts with a simple currency exchange and transfer system. The product is especially attractive to brokers with high net worth and corporate clients, where their accounts could be used to handle their cross-currency needs to both receive and withdraw in different currencies.
Gold-i: Returning to the risk management theme, Gold-i launched Visual Edge. The product provides a visual interface to view client performance for monitoring A and B-Book flow and which customers should be allocated into which group. With spreads across the board decreasing, and low volatilities, the value add to brokers is the ability to maximize profits from customer order flow.
Tradesmarter: I touched on it in Monday’s article, as Tradesmarter released a ‘smart’ bonus system. Based on customer engagement and other factors, the product automates bonus incentives that are offered to new customers as well as to traders issuing a withdrawal request. It uses aspects of ‘flash sales’ and incentives that are becoming popular in the eCommerce space. Automation in the sales and marketing process among brokers is beginning to become more popular. Therefore, the smart bonus system appears to fit into this trend.
FX Transparency: Before entering the retail space, FX Transparency is best known for their Transaction Cost Analysis (TCA) product used by buy-side traders and asset managers to compare their execution with benchmark pricing. Using their technology, they introduced a new rating system where brokers can submit their executions to be graded against benchmarks. For brokers, the product provides a third party grade which can be marketed to clients to show their execution quality. It will be interesting to see which brokers take up the product and how they use the independent review to market themselves.
JFD Brokers: JFD Brokers has been one of those ‘under the radar brokers’ that has grown quickly due to providing a wide selection of FX and CFD products, tight pricing, and solid support. Having attracted asset managers, JFD Brokers used the London Summit to introduce its new B2B offering, JFD Prime, as well as made reference to its upcoming JFD Wealth product. In a nutshell, through its Prime unit, JFD Brokers is able to offer broker customers liquidity in tens of thousands of products, providing a one stop shop of liquidity for hedging single stock CFDs and the more common FX, equity index and commodity products. A MetaTrader 4 broker, JFD will also be bringing to market a proprietary platform for its Prime customers in 2015.
Beyond the presenters, the Summit included several other attendees and exhibitors with new products.
Pandela: One of the most buzzing stands was Pandella’s, an automated trading strategy platform from Wall Street Trading Room. Not a new product, this was Pandella’s first appearance on the forex industry scene. Judging by the interest from attendees, I am willing to bet we’ll see some broker partnerships with Pandella in the near future.
Jumio: I’ll intro this firm by saying that if I was a VC or Fintech investor, I would be all over these type of companies, and need to write a separate review about them. Jumio was one of the presenters at the Networking Blitz program where they introduced themselves to the forex industry showing their Netverify product. Jumio already had a foothold in the Bitcoin sector with their Bison offering. Basically, Netverify is a digital account verification platform which lets customers take a photo of their ID card with their webcam of phone app. A separate picture is taken of them to compare the ID to their current appearance. Jumio then verifies the image to optimize the client identification and KYC process. To make a long story short, improving KYC efficiency and cutting down paperwork is on the top of a lot of bank’s list of priorities when they view potential fintech partners.
Perfectna: Another upcoming platform is Echo-Trading from Perfectna, a California- based startup. Headed by Daniel Pena who attended the Summit, Echo-Trading is a SaaS-based social trading platform. Pena explained that they are aiming to provide a copy trading alternative for brokers as a separate offering to their clients. The idea being that rather than having it connected to a trader’s MT4 or similar account, Echo-Trading operates as a separate solution for users wanting a simple solution to get involved with the market. The obvious drawback is that separate accounts are needed for a customer to self-trade and copy trade. However, as Echo-Trading doesn’t need to integrate with a separate platform, Perfectna believes they can provide a solution more catered to the needs of copy trading.
Beyond these products, there was a boat-load of other new products and attendees from startups at the Summit that I got a chance to preview, as well as many others that I am sure I have missed. If you attended the event and a product struck you as impressive, let us know in the comments.