Executive Interview: Nick Sproule, Head of Business Development, think IS

by Andrew Saks McLeod
  • In this week's Forex Magnates Executive Interview, think IS Head of Business Development Nick Sproule details important points to consider relating to providing a fully customizable technology solution to retail brokers.
Executive Interview: Nick Sproule, Head of Business Development, think IS

Functional diversity is becoming an important mantra among technology solutions providers whilst vying for market share in what has become an increasingly competitive market.

Since the popularity and acceptance of electronic trading among a retail audience has increased within the last few years, the requirement for technology providers, which are present in numbers, to target their offerings towards certain segments of the industry has become not only a method of establishment and survival, but also a method of firms carving out a sustainable future.

nick-sproule

Nick Sproule,
Head of Business Development,
think IS

As a result, the ecosystem is complex, as there are a great deal of vendors, each with a different target market, resulting in each vendor having a handful of competitors within the space in which it operates.

There are schools of thought, for example, which understand and adhere to the principle of off-the-shelf solutions, others favor the customizable approach, as defined by Stanislav Stolyar, VP FX Products at Devepxerts who, whilst addressing a discussion panel at the iFXEXPO in Cyprus this year stated that “Our business is all about customization, we can provide a suite of technologies that can suit each business circumstance but we are looking for long term relationships.”

“Therefore we can increase performance and help brokers meet demand when a broker starts to grow. It is perilous to go into business and start up in two days with an off the shelf system. Management teams of firms need to learn the business as they grow and adapt accordingly. It’s also about marketing advantage. Why would a client or trader pick one also-ran product over another similar one?” is Mr. Stolyar’s view.

In Britain, where customization dominates the retail FX markets due to the nature of the nation’s very CFD-focused trading landscape, many brokerages employ their very own in-house development and support teams to provide completely bespoke platforms, as well as the nation being home to a large percentage of institutional firms, again many of which prefer bespoke platforms.

In this week’s Forex Magnates Executive Interview, Nick Sproule, Head of Business Development at British trading and technology solutions provider think IS elaborates on the important factors to consider when providing a fully customizable retail FX technology solution.

Please detail your professional background, and what led you to your leadership position at Think IS.

My career in the derivative world started at Cantor Index in 2002. The business focused predominantly on spread betting and CFD’s to retail and small institutional clients. Indices and equities dominated the trading at the time with only a few clients trading FX. Cantors was one of the three or four dominant players at the time and I remember the spreads that all the firms were able to get away with at the time. Imagine paying 8 points on Cable these days?

I was then asked to help them establish a peer-to-peer sports betting exchange called Cantor Spreadfair and was involved there for a couple of years. It was a reasonable success but there weren’t sufficient punters who had the appetite to make markets on Total Goals or number of bookings in a football match.

I was then approached to help Betfair establish their Tradefair brand which was a white label of London Capital Group. Tradefair grew to be the 5th biggest player in the UK in 2 years and was extremely successful while a large team of developers worked on the MTF that was to become LMAX. I left Tradefair shortly before LMAX launched to get married and then join the team at Think IS.

Upon assuming your post, what did you initially seek to achieve and how did you set about achieving it?

I joined think IS when the product was still in its infancy and being completed by a very strong team of developers. The initial premise of the business was to solve the issues that so brokers have with being able to gain good management information.

When I was at Tradefair we would get a spreadsheet at the end of the day about our clients activity and then have write macros and manipulate the data to try and get anything from it. We had to employ people to generate reports and there had to be an easier way.

Think IS had looked to solve with HQ by integrating multiple data sources and presenting that information in a meaningful and usable way.

Also, we wanted to make the setting up of a white label much more easy and flexible. Typically you would get what the provider had with some different colours and your logo. Wouldn’t it be great if you could bring in your own content, build widgets and have news displayed based on what you were actually trading? That’s we we set out to achieve with Panorama.

My first tasks were to go over what was being developed and make suggestions based on my experience as a provider and a partner. This is the information which would have been invaluable to me and therefore I concentrated on the best way to present it.

With regard to the typical journeys clients took and how could we make that more efficient, we wanted brokers to be able to onboard clients in the easiest manner with best customer experience. The customers had to be at the heart of the thinking behind what we were developing.

Please go into detail about how the Panorama Trading Suite is capitalized, and what its target market is. How does it compete against other retail or institutional platforms, and how is it connected to Liquidity pools?

Panorama was not designed to be rolled out to hundreds of different brokers and was always going to be bespoke work done for each broker. At the time of its initial development we were focused on the CFD and equity space and those types of clients did not want their offering to look the same as one of their competitors. It is one of the ways they feel they are able to differentiate where clients may not be as aware of differences in spread and cost of dealing.

It is essentially a presentation layer that the broker can customize to suit their client base we are able to receive prices and execute orders that the underlying technology supports. The broker can also decide what content they wish to display and it has always been our objective to work with best of breed and allow partners to decide. We do this for new, charts, video, squawk etc. Once integrated it is very easy to white label as there is a full CMS system behind the scenes.

We are happy to work on a transaction fee basis or outright development. Some brokers want to be able be able to fully control their margins and so prefer not to give away transaction based costs.

With the low spreads and high operating costs, combined with the amount of competition among trading firms, all vying for the same market, do you think it is better for a broker to take an off-the-shelf solution from a standard platform provider, then take a back end technology solution and start up with minimal cost, or do you think there is merit in paying for total customization to give the broker a set of different features, given that the broker will probably not be able to charge clients an extra commission or raise the spread?

The trend appears to be to take a selection of off the shelf solutions. MetaQuotes is still by far the dominant player but I am sure that inroads will be made by tradable, cTrader, xStation and others. The way I see the market evolving will be that brokers will offer a number of different platforms and allow their clients to choose.

That way they will not lose any current or prospective clients because they don’t offer the platform.

It makes it harder for new entrants unless they have deep pockets and can afford to take on a few of them.

Bespoke solutions offer the advantage that not one size fits all and that you can customize your offering to suit your client base. Using best of breed products and components is still attractive to some clients.

In which regions do you see the most demand for your bespoke solutions, and what factors contribute to this?

The UK and EU have been where we have seen the most growth. I don’t think there is any particular reason for that other than our team is still relatively small and these are the areas we are familiar with and where our contacts are.

We are seeing lots more interest in companies that market to China and the Far East where we nearly set up an office in HK. Unfortunately, our rep there got a fantastic offer he could not refuse and that was that. I am sure will look to do it again very soon but for now I am happy in London.

Let us know some detail about think IS data migration should a firm wish to switch technology provider. How is data migrated, and disaster recovery implemented whilst the transfer to new systems takes place?

These are dealt with on case by case basis because each is different. We have done them via API and .csv uploads. We can also make direct connections to the client’s database but all of this would be covered in more detailed discussions with the client.

Does Think IS provide its own hosting, or subcontract it to Equinix or Volta, or other data center campus? What is the key to low latency when considering which hosting system to use and its location?

We are able to host the solution for clients at our data centre in Docklands, London and it has been built with fail over capabilities. Clients are also able to host the solution if they feel that they would prefer that option and we just require some access to perform maintenance and monitor the performance.

With MetaTrader 4 and now new platforms such as cTrader and tradable being very much known quantities, how does think IS retain its market share? Does it compete with platform providers, or with platform providers as well as technology integration companies alike?

The only way is to constantly innovate and get feedback from our clients . We speak to lots of brokers who try and share their issues and pain points and we try and find solutions for those.

HQ has been the biggest growth area for us and by being fairly unique in our ability to aggregate data from multiple sources, we have continued to grow. We have looked to integrate with other partners who have a great deal more knowledge than we do and built a tool that is truly useful to brokers.

Our work with Tom Higgins at Gold-i has been invaluable and they have been a great support to our business. Their Bridge and Link are some of the best out there and I am sure we will continue to work closely with them.

We feel that by leveraging off a number of good partnerships and by being able to work with many different people we can stay ahead of the competition and continue to innovate.

Which new markets do you consider interesting and worth entering?

We have been doing some very interesting work with deliverable FX. We will continue build out our CFD, spread betting options and are looking at some share dealing and fund opportunities.

Does being a fully integrated system including Trading Platform and back office/CRM represent an easy maintenance procedure, and similarly how does this compare to selecting a platform from MetaQuotes and back office/CRM from a technology integrator?

In some ways it may be easier because it can all be hosted within one environment and on the same infrastructure. But we are used to having a number of moving parts that are interdependent.

Do you think the cost model of charging a cost per million is becoming obsolete as there is less margin? Is it better to charge a per-seat license as NetDania does with its NetStation platform whereby a fixed cost is charged per trader, therefore if a high volume trader comes on board, the broker gains, meaning the broker will continue with that platform.

On a cost per million model, if the trader is doing high volume, then the capitalization costs go up, which is short term great for the provider, but long term could cause a switch to fixed pricing model.

Our view is that a cost per seat model for our HQ product is the best model to operate. As the broker grows they are able to scale their requirements with more seats and build efficiencies within their business. HQ was designed to make each operator, where they are the MD or sales assistant, more efficient. Very few brokers want to pay cost per million on a CRM and management information tool.

For platforms, that is different. Cost per million or fixed will suit different operations. Some are happy to pay as their business grows and other want to be able to control their margins. I think being flexible and understanding the relationship you have with the broker is paramount. We are both working to ensure that the partnership is successful and we try to keep that at the forefront of our thinking.

What are your plans for the remainder of the year?

We are continuing to enhance the HQ product with a new look and feel. More user friendly and easier to customize for the broker. New integrations with affiliate and IB management solutions and with various platform providers.

Functional diversity is becoming an important mantra among technology solutions providers whilst vying for market share in what has become an increasingly competitive market.

Since the popularity and acceptance of electronic trading among a retail audience has increased within the last few years, the requirement for technology providers, which are present in numbers, to target their offerings towards certain segments of the industry has become not only a method of establishment and survival, but also a method of firms carving out a sustainable future.

nick-sproule

Nick Sproule,
Head of Business Development,
think IS

As a result, the ecosystem is complex, as there are a great deal of vendors, each with a different target market, resulting in each vendor having a handful of competitors within the space in which it operates.

There are schools of thought, for example, which understand and adhere to the principle of off-the-shelf solutions, others favor the customizable approach, as defined by Stanislav Stolyar, VP FX Products at Devepxerts who, whilst addressing a discussion panel at the iFXEXPO in Cyprus this year stated that “Our business is all about customization, we can provide a suite of technologies that can suit each business circumstance but we are looking for long term relationships.”

“Therefore we can increase performance and help brokers meet demand when a broker starts to grow. It is perilous to go into business and start up in two days with an off the shelf system. Management teams of firms need to learn the business as they grow and adapt accordingly. It’s also about marketing advantage. Why would a client or trader pick one also-ran product over another similar one?” is Mr. Stolyar’s view.

In Britain, where customization dominates the retail FX markets due to the nature of the nation’s very CFD-focused trading landscape, many brokerages employ their very own in-house development and support teams to provide completely bespoke platforms, as well as the nation being home to a large percentage of institutional firms, again many of which prefer bespoke platforms.

In this week’s Forex Magnates Executive Interview, Nick Sproule, Head of Business Development at British trading and technology solutions provider think IS elaborates on the important factors to consider when providing a fully customizable retail FX technology solution.

Please detail your professional background, and what led you to your leadership position at Think IS.

My career in the derivative world started at Cantor Index in 2002. The business focused predominantly on spread betting and CFD’s to retail and small institutional clients. Indices and equities dominated the trading at the time with only a few clients trading FX. Cantors was one of the three or four dominant players at the time and I remember the spreads that all the firms were able to get away with at the time. Imagine paying 8 points on Cable these days?

I was then asked to help them establish a peer-to-peer sports betting exchange called Cantor Spreadfair and was involved there for a couple of years. It was a reasonable success but there weren’t sufficient punters who had the appetite to make markets on Total Goals or number of bookings in a football match.

I was then approached to help Betfair establish their Tradefair brand which was a white label of London Capital Group. Tradefair grew to be the 5th biggest player in the UK in 2 years and was extremely successful while a large team of developers worked on the MTF that was to become LMAX. I left Tradefair shortly before LMAX launched to get married and then join the team at Think IS.

Upon assuming your post, what did you initially seek to achieve and how did you set about achieving it?

I joined think IS when the product was still in its infancy and being completed by a very strong team of developers. The initial premise of the business was to solve the issues that so brokers have with being able to gain good management information.

When I was at Tradefair we would get a spreadsheet at the end of the day about our clients activity and then have write macros and manipulate the data to try and get anything from it. We had to employ people to generate reports and there had to be an easier way.

Think IS had looked to solve with HQ by integrating multiple data sources and presenting that information in a meaningful and usable way.

Also, we wanted to make the setting up of a white label much more easy and flexible. Typically you would get what the provider had with some different colours and your logo. Wouldn’t it be great if you could bring in your own content, build widgets and have news displayed based on what you were actually trading? That’s we we set out to achieve with Panorama.

My first tasks were to go over what was being developed and make suggestions based on my experience as a provider and a partner. This is the information which would have been invaluable to me and therefore I concentrated on the best way to present it.

With regard to the typical journeys clients took and how could we make that more efficient, we wanted brokers to be able to onboard clients in the easiest manner with best customer experience. The customers had to be at the heart of the thinking behind what we were developing.

Please go into detail about how the Panorama Trading Suite is capitalized, and what its target market is. How does it compete against other retail or institutional platforms, and how is it connected to Liquidity pools?

Panorama was not designed to be rolled out to hundreds of different brokers and was always going to be bespoke work done for each broker. At the time of its initial development we were focused on the CFD and equity space and those types of clients did not want their offering to look the same as one of their competitors. It is one of the ways they feel they are able to differentiate where clients may not be as aware of differences in spread and cost of dealing.

It is essentially a presentation layer that the broker can customize to suit their client base we are able to receive prices and execute orders that the underlying technology supports. The broker can also decide what content they wish to display and it has always been our objective to work with best of breed and allow partners to decide. We do this for new, charts, video, squawk etc. Once integrated it is very easy to white label as there is a full CMS system behind the scenes.

We are happy to work on a transaction fee basis or outright development. Some brokers want to be able be able to fully control their margins and so prefer not to give away transaction based costs.

With the low spreads and high operating costs, combined with the amount of competition among trading firms, all vying for the same market, do you think it is better for a broker to take an off-the-shelf solution from a standard platform provider, then take a back end technology solution and start up with minimal cost, or do you think there is merit in paying for total customization to give the broker a set of different features, given that the broker will probably not be able to charge clients an extra commission or raise the spread?

The trend appears to be to take a selection of off the shelf solutions. MetaQuotes is still by far the dominant player but I am sure that inroads will be made by tradable, cTrader, xStation and others. The way I see the market evolving will be that brokers will offer a number of different platforms and allow their clients to choose.

That way they will not lose any current or prospective clients because they don’t offer the platform.

It makes it harder for new entrants unless they have deep pockets and can afford to take on a few of them.

Bespoke solutions offer the advantage that not one size fits all and that you can customize your offering to suit your client base. Using best of breed products and components is still attractive to some clients.

In which regions do you see the most demand for your bespoke solutions, and what factors contribute to this?

The UK and EU have been where we have seen the most growth. I don’t think there is any particular reason for that other than our team is still relatively small and these are the areas we are familiar with and where our contacts are.

We are seeing lots more interest in companies that market to China and the Far East where we nearly set up an office in HK. Unfortunately, our rep there got a fantastic offer he could not refuse and that was that. I am sure will look to do it again very soon but for now I am happy in London.

Let us know some detail about think IS data migration should a firm wish to switch technology provider. How is data migrated, and disaster recovery implemented whilst the transfer to new systems takes place?

These are dealt with on case by case basis because each is different. We have done them via API and .csv uploads. We can also make direct connections to the client’s database but all of this would be covered in more detailed discussions with the client.

Does Think IS provide its own hosting, or subcontract it to Equinix or Volta, or other data center campus? What is the key to low latency when considering which hosting system to use and its location?

We are able to host the solution for clients at our data centre in Docklands, London and it has been built with fail over capabilities. Clients are also able to host the solution if they feel that they would prefer that option and we just require some access to perform maintenance and monitor the performance.

With MetaTrader 4 and now new platforms such as cTrader and tradable being very much known quantities, how does think IS retain its market share? Does it compete with platform providers, or with platform providers as well as technology integration companies alike?

The only way is to constantly innovate and get feedback from our clients . We speak to lots of brokers who try and share their issues and pain points and we try and find solutions for those.

HQ has been the biggest growth area for us and by being fairly unique in our ability to aggregate data from multiple sources, we have continued to grow. We have looked to integrate with other partners who have a great deal more knowledge than we do and built a tool that is truly useful to brokers.

Our work with Tom Higgins at Gold-i has been invaluable and they have been a great support to our business. Their Bridge and Link are some of the best out there and I am sure we will continue to work closely with them.

We feel that by leveraging off a number of good partnerships and by being able to work with many different people we can stay ahead of the competition and continue to innovate.

Which new markets do you consider interesting and worth entering?

We have been doing some very interesting work with deliverable FX. We will continue build out our CFD, spread betting options and are looking at some share dealing and fund opportunities.

Does being a fully integrated system including Trading Platform and back office/CRM represent an easy maintenance procedure, and similarly how does this compare to selecting a platform from MetaQuotes and back office/CRM from a technology integrator?

In some ways it may be easier because it can all be hosted within one environment and on the same infrastructure. But we are used to having a number of moving parts that are interdependent.

Do you think the cost model of charging a cost per million is becoming obsolete as there is less margin? Is it better to charge a per-seat license as NetDania does with its NetStation platform whereby a fixed cost is charged per trader, therefore if a high volume trader comes on board, the broker gains, meaning the broker will continue with that platform.

On a cost per million model, if the trader is doing high volume, then the capitalization costs go up, which is short term great for the provider, but long term could cause a switch to fixed pricing model.

Our view is that a cost per seat model for our HQ product is the best model to operate. As the broker grows they are able to scale their requirements with more seats and build efficiencies within their business. HQ was designed to make each operator, where they are the MD or sales assistant, more efficient. Very few brokers want to pay cost per million on a CRM and management information tool.

For platforms, that is different. Cost per million or fixed will suit different operations. Some are happy to pay as their business grows and other want to be able to control their margins. I think being flexible and understanding the relationship you have with the broker is paramount. We are both working to ensure that the partnership is successful and we try to keep that at the forefront of our thinking.

What are your plans for the remainder of the year?

We are continuing to enhance the HQ product with a new look and feel. More user friendly and easier to customize for the broker. New integrations with affiliate and IB management solutions and with various platform providers.

About the Author: Andrew Saks McLeod
Andrew Saks McLeod
  • 661 Articles
About the Author: Andrew Saks McLeod
  • 661 Articles

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