Forex Magnates talked with the new CEO of OANDA Corporation, Ed Eger, in an exclusive first interview, following his recent appointment.
Our interview brings a fresh look from the industry veteran that has held senior roles in the payments technology space at the most prominent firms, and who just took the helm of the Canada headquartered online retail Forex broker, with offices and regulatory hubs around the world.
For background for our readers, Mr. Eger was recently head of PayPal’s North American business, after serving as CEO of Citibank’s International Cards business, two senior roles in the payments industry that influenced millions of consumers (both directly and indirectly), and that has led up to his new role as OANDA’s chief executive.
During the interview, Forex Magnates (FM) asked questions that Ed Eger (EE) answered as described below, to help share his perspectives on leading the company under his new direction and based on OANDA’s existing core values and strengths.
We have reported below with answers about a possible IPO, the Currensee acquisition and other relevant developments explained by OANDA’s Chief:
FM: Please provide a summary of your professional background, as a basis for our interview.
EE: My professional background is in customer-focused, technology-led financial services companies, working in markets all over the world. I most recently came from PayPal, where I ran the significant North American business, while at the same time launched businesses in markets such as Brazil, Mexico and South Africa. Before that I was CEO of Citibank’s International Cards business, a business that spans 50 countries around the world. I’ve spent my career working in fast changing businesses across many different geographies. What has always been common is the use of technology to disrupt industries where consumers aren’t being served as well as they could.
FM: What led you to join OANDA, how did this opportunity arise for both sides?
EE: Well, my background has technically been in financial services – OANDA is technically a financial services company – but at its heart OANDA, like PayPal, is a technology-driven company. With both companies, the opportunity for me was to focus on using disruptive technology to empower customers.
EE: When I was approached by OANDA, I saw an opportunity to lead a company that has been disrupting the forex market from it’s inception with its innovative technology and take that to the next level, while also further expanding globally.
FM: How did your senior roles in payments processing and credit card related market segments such as at Citibank, help to shape your perspective on Foreign Exchange and the world of currency trading?
EE: In each of these segments I have focused on how best to serve customers’ needs. In forex, I see an opportunity to serve clients more effectively and efficiently – I believe they are underserved in the retail forex market today. That needs to change.
EE: OANDA is on the side of our clients. Our value proposition is simple and clear: We provide clients with a more transparent and fair market to trade on. We want our clients to succeed, because we will succeed when they do. To help our clients, there are many things we offer which are unique to OANDA. For example, we never reject a trade, we offer a range of free tools — such as the Top 100 Trades, MarketPulse and Open Positions Book — all of which help our customers make better, informed trading decisions.
EE: The “secret sauce” at OANDA is really our legacy of innovation. Because we are a technology company at our core, we are always working to discover new and better ways to leverage that technology. For instance, we provide industry-leading speed of execution. We learned about this advantage through our acquisition of Currensee last fall. Before we acquired them, Currensee collected data on execution speeds in the retail industry across many different brokers. That data taught us that OANDA performs up to 20 times faster than others in the industry. The difference between an execution of 11 milliseconds versus that of 400 or more can mean the potential for a 25% better return, using our platform. We will continue to leverage our technology to make our traders better, every time.
FM: What can you tell us about that, how do you perceive the FX market considering your unique background?
EE: I’m excited about coming into the FX market. I look at this industry first from the vantage point of the retail investor. Understanding why they are trading and what their real needs are will enable us to direct our technology to constantly improve in order to provide ever better solutions for them.
FM: Do you view this differently now that you have joined a retail online forex brokerage, and if so how?
EE: I see huge potential for OANDA to continue to lead the retail forex space, to continue to win trader accolades, to continue to drive innovation in the market, and continue to create a more fair and transparent market, — not only in the regions where we operate today but also as we expand into new ones.
FM: What was the transition like during your first month, and through the holidays after joining in December?
EE: Outside of the holidays, I’ve really only been on the job for about 40 days. I’ve been asking a lot of questions and doing a lot of listening. We have a great team here, and as we move forward I’ve challenged everyone to move faster. One thing I’ve learned is that we need to do a better job of talking about all of the great things we do for our customers – things that set us apart from the competitive set.
FM: Did joining at the end of the year help give you a year-end perspective, as highlighted in the Annual Update to members, and in order to get a fresh view of goals for 2014?
EE: Yes. I’ve had an opportunity to see data as the year closed and to be involved in establishing goals for 2014. By and large, the company is on the right track, which is obviously a great place to start.
FM: Was that your first correspondence to OANDA’s clients during the annual update email to clients?
EE: Actually, no. I introduced myself shortly after the initial announcement was made that I was joining the company.
FM: How many clients does the company service, as this number is constantly changing for firms, what are the latest figures you can share, if any?
EE: As a private company, we do not disclose those numbers. I will say that we continue to grow our customer base well and I believe there is an even larger opportunity to attract more customers in 2014 and beyond.
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FM: Are company goals generally more metric-focused or process-focused?
EE: I’d say it’s a bit of both – we have shareholders and a Board to which we need to answer, so these goals are metrics-driven; but at the end of the day, a lot of efficiencies and innovation are inherently process-focused.
FM: What can you tell us about 2014, things already underway, new plans in development or concepts?
EE: We just announced a new partnership with BeeksFX that provides our clients the ability to trade faster by using their VPS capabilities. As we started the year we launched another partnership with Trade With Precision, providing webinars and other information valued by traders. And we’ll have more partner news to share soon. Stay tuned.
FM: The Currensee acquisition was an exciting deal, how did that enthusiasm translate into results, has the company realized yet the full benefits it anticipated considering that it has only been recently integrated?
EE: The integration of Currensee is still being finalized and that is part of the news we’ll be sharing soon.
FM: Why did OANDA buy Currensee and for how much was the deal valued at?
EE: As a private company, I can’t share the terms of the acquisition. As part of our education offering to our clients, we knew that copy trading was an important aspect, as it helps remove some of the barriers to entering the forex market. It’s not easy to trade forex; it requires commitment if you’re going to be successful, and copy trading allows customers to get their feet wet and observe more experienced traders as they develop their own risk management strategies. I believe that Currensee’s capabilities bring us another great offering to meet the investing needs of certain client segments.
FM: What is the biggest weakness OANDA is currently suffering from, and how do you hope to overcome it?
EE: I think that the biggest challenge facing us, or anyone in this industry, is speed. I believe that the markets and the industry will change more in the next three years than they have in the last ten. My challenge to our staff is to act more like the technology company that we are. We have great talent, and we can go-to-market more quickly—continuing to bring innovation to the market.
FM: Who are the people you are working most closely with at OANDA following recent key management hires?
EE: I work very closely with all members of the Executive Committee, as well as with the senior management teams — from the regional Managing Directors to our Sales leads, our Marketing leads, our Customer Support leads, and frankly some of our customers as well. This has to be a complete top-to-bottom team effort, and I’m still learning every day about our capabilities and the market.
FM: What would you say about the relatively large percentage of senior management turnover in recent years, is this because of a coinciding shift in the firm’s position from exponential growth to a reorganized business strategy as the firm reaches a new level of maturity? What can you say regarding the consensus about this, or your opinion on possibly reasons for the staff rotations?
EE: It’s really just the normal course of business. We’ve had some great talent move on to take on new opportunities, and we’ve also hired some awesome new senior talent – we’ll be sharing some of that news soon as well. It is a compliment to us that others feel we are so good that they want to poach some of our teammates.
FM: How do you best see leveraging OANDA’s strength such as its technology culture and development initiatives or its staff?
EE: Our foundation is as a technology company. OANDA used technology to bring a lot of firsts to the forex market – immediate execution; instant settlement on trades; trades of any size between one unit and 10 million units – and we’ll continue to disrupt things in order to create a more fair and transparent market for our customers.
EE: Another great example of this is a new account registration capability that we just launched in Canada. It was a challenge I made to the engineering group on my second day on the job, and eight weeks later – to the day – they launched the program. That is a true testament to the strength of our technology platform and team. We’ll have more details to share on the specifics later this week.
FM: Are there specific geographical markets or products that you would like to focus on more, that you could give an example about?
EE: As you’ve seen in some of the examples above, we are working quickly to bring new and differentiated capabilities to markets around the world. At this point, I’m not able to tell the competition how we are thinking about the market and what we will bring to it. However, I can assure you we will see new markets and new products launched in 2014.
FM: The firm has historically focused more on B2C than B2B yet recently opened up its doors to a partner program to Introducing Brokers, has this selective experiment-like test produced the results that were hoped for, and if so, could efforts to grow partner business become a key endeavor?
EE: We have only opened the program up to a limited number of partners at the moment. We have a number of initiatives on the immediate horizon right now that are our top priority.
FM: How realistic could an IPO be in 2014? Has any target date been generally agreed upon? And if so, what exchange would you prefer to be listed on?
EE: When the time comes, we’ll look at which exchange makes most sense for us. No timelines are set in any way. For me, an IPO is just a milestone in the course of a longer journey for OANDA.
FM: What’s next on the horizon? Tell us about your next steps at the company or big-picture plans for the brand?
EE: We have a lot of exciting news coming very soon … including product updates, geography expansion, new hires, and partner initiatives.