We’ve said it time and time again. The Asian market, and in particular China, offers outstanding opportunities for brokers looking to expand their FX and binary options brand. The economic growth China has experienced in recent years has generated a wave of new riches looking for new investment opportunities.
The low entry-level capital requirements and high growth opportunities presented by forex trading, together with the increased use of the internet, have gotten foreign brokers to focus their sights on Asia. The issue lies, however, in the high level of localization needed to succeed in the region. With significant differences in culture, technology, ways of doing business, language, and a whole array of other factors, entering Asia is no easy task.
In addition to brokers, software vendors are also grabbing a piece of the pie. Tech providers (both global and local), are taking huge steps in order to advance the FX and binary options industry and help brokers achieve success.
Those tech companies in the fintech sector which have successfully navigated the path to enter Asia, and that are assisting brokers in doing the same, have realized that there is a huge appetite for financial investment opportunities, that there is excess wealth and that there is tremendous demand for turnkey solutions from brokerages. These companies have also realized that in order to work in Asia, you have to speak the language (not just literally, but figuratively too).
So how is the fintech market being conquered?
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Let’s start with where specifically brokerages are popping up: according to tech provider Leverate, 66.67% of the tech providers’ clients are located in China, 11.11% are located in Taiwan, 8.33% in Hong Kong, 8.33% in Singapore and 5.56% in Japan. These numbers to some extent reflect the overall condition of the market.
Around 50% of business for tech providers comes from binary options brokerages and 50% from forex, which is a surprising number, given the fact that there is no defined path for binary options trading.
90% of brokerages in China demand MT4 from their providers. Southeast Asia is accepting of alternate platforms.
Some of the big fintech players in the region are LMAX, CFH and Fortex, all three global firms that focus their business on liquidity; Leverate, a global company with extreme localization in Asia which offers both front end and back end systems to brokerages, including liquidity; Leanwork, a local tech provider, and a number of providers offering hacked and fake versions of the MT4 platform. In terms of who dominates the market amongst traders (B2C), the answer is IBs. In Asia, the IB acts as a money manager for small to medium groups of investors and especially in China, the IB is king.
The mere size of China and APAC’s hunger for new trading technology means that more and more brokers both from near and far, will continue to be attracted to the area in search of opportunity.