The fragility of brokers’ dependence on third-party technology has been exposed
However, out of adversity comes opportunity
Op-ed
On September 23rd, 2022, Apple removed two popular front-end trading platforms from its App Store. Despite being widely used by traders and the systems themselves forming the backbone of a significant number of retail brokers, the deletion happened without warning, ripping the platforms and their functionalities from the App Store. While the reasons for Apple’s actions are still unclear, the fragility of brokers’ dependence on third-party technology has become obvious.
The platforms in question, MT4 and MT5, are front-end trading platforms that provide access to forex and CFD markets, including stocks, commodities and futures. For a long time, these platforms gave traders an easy gateway into markets and, for brokers, offered convenient bolt-on trading capabilities that became central to their operations; their removal from the mobile app store has therefore come as a shock to the industry. It severed smaller brokers’ access to key markets while larger brokers using MT4/MT5 technology had their functionality and market access cut.
In a world of countless vendor-based solutions ready to plug gaps, disruption is temporary, but questions linger over whether other third-party solutions used to fill the cracks could succumb to the same fate as MT4/MT5. The primary problem is, therefore, not in the inconvenience, but rather the reputational impact on firms reliant on these platforms. This episode has also revealed to traders that many platforms rely on the same technology and that, perhaps, their secret sauce is not so secret after all.
A Necessary Wakeup Call?
Despite being a nasty shock for many, the App Store debacle has a silver lining in that it has triggered a race for solutions and pushed firms to re-think their technology and their offerings, a move that will benefit brokers and their clients in the long-term. Mobile trading is a kingmaker among retail trading platforms as typically the most popular mode of trading, shoring up these platforms is, therefore, essential.
The shock has led to serious discussions across retail broking boardrooms on how to reduce dependence on unreliable third parties and regain control of their platforms, allowing them to differentiate and take control of their innovation. The result has been a surge in requests for Progressive Web Applications (PWA) from small brokers wanting to restore functionality and larger brokers looking to take greater control of their technology stack. Rather than being acquired through the App Store, PWAs exist online using common web technologies including HTML, CSS, JavaScript and WebAssembly.
PWAs directly address the App Store issue as they are not beholden to the whims of online marketplaces and are fully controllable by the broker. PWAs have long been a pillar of most modern web tools. While they are not new, modern PWAs are sophisticated and offer a wide range of advantages, including a less burdensome set of regulatory obligations and greater flexibility for change in response to market demand. The independence and flexibility of PWAs, paired with modern development technology, the ability to plug into broad pools of liquidity and modern interface design means that they are a natural solution.
“Out of Adversity Comes Opportunity”
Benjamin Franklin’s famous adage rings true for firms hit by the MT4/MT5 deletion. They have the opportunity to take a broader look at their mobile operations, review their offering and think about what makes them different. In addition, despite the glitzy exteriors of retail broking apps, if under the bonnet the same technology powers all platforms, then there is little incentive for clients to choose their product as their platform of choice.
The retail trading market is fiercely competitive – clients of course want a reliable platform not prone to outages, but also functionality and accessibility they can’t get elsewhere. PWAs and platforms built in an open way will allow firms to consider and choose which elements of their stack they would like to own themselves to boost resilience but also to differentiate their platform. While building a bespoke tech stack might seem like a big undertaking, modern approaches to accelerated development significantly speed up time-to-market and mitigate delivery risk. These recent events also show the long-term prize is certainly worth the effort.
The MT4/MT5 issue has forced platforms to look in the mirror. The situation has raised fundamental questions beyond the simple replacement of select functionality – but shoring up the foundations on which they are built while taking back control of the speed of innovation and being able to respond faster than the market. Rather than being a thorn in the industry's side, the short-term headache could be the industry’s long-term gain as it shifts its perspective on the technology on which it is built.
Amanda Harrison is a Senior Sales Executive at Adaptive Financial Consulting
On September 23rd, 2022, Apple removed two popular front-end trading platforms from its App Store. Despite being widely used by traders and the systems themselves forming the backbone of a significant number of retail brokers, the deletion happened without warning, ripping the platforms and their functionalities from the App Store. While the reasons for Apple’s actions are still unclear, the fragility of brokers’ dependence on third-party technology has become obvious.
The platforms in question, MT4 and MT5, are front-end trading platforms that provide access to forex and CFD markets, including stocks, commodities and futures. For a long time, these platforms gave traders an easy gateway into markets and, for brokers, offered convenient bolt-on trading capabilities that became central to their operations; their removal from the mobile app store has therefore come as a shock to the industry. It severed smaller brokers’ access to key markets while larger brokers using MT4/MT5 technology had their functionality and market access cut.
In a world of countless vendor-based solutions ready to plug gaps, disruption is temporary, but questions linger over whether other third-party solutions used to fill the cracks could succumb to the same fate as MT4/MT5. The primary problem is, therefore, not in the inconvenience, but rather the reputational impact on firms reliant on these platforms. This episode has also revealed to traders that many platforms rely on the same technology and that, perhaps, their secret sauce is not so secret after all.
A Necessary Wakeup Call?
Despite being a nasty shock for many, the App Store debacle has a silver lining in that it has triggered a race for solutions and pushed firms to re-think their technology and their offerings, a move that will benefit brokers and their clients in the long-term. Mobile trading is a kingmaker among retail trading platforms as typically the most popular mode of trading, shoring up these platforms is, therefore, essential.
The shock has led to serious discussions across retail broking boardrooms on how to reduce dependence on unreliable third parties and regain control of their platforms, allowing them to differentiate and take control of their innovation. The result has been a surge in requests for Progressive Web Applications (PWA) from small brokers wanting to restore functionality and larger brokers looking to take greater control of their technology stack. Rather than being acquired through the App Store, PWAs exist online using common web technologies including HTML, CSS, JavaScript and WebAssembly.
PWAs directly address the App Store issue as they are not beholden to the whims of online marketplaces and are fully controllable by the broker. PWAs have long been a pillar of most modern web tools. While they are not new, modern PWAs are sophisticated and offer a wide range of advantages, including a less burdensome set of regulatory obligations and greater flexibility for change in response to market demand. The independence and flexibility of PWAs, paired with modern development technology, the ability to plug into broad pools of liquidity and modern interface design means that they are a natural solution.
“Out of Adversity Comes Opportunity”
Benjamin Franklin’s famous adage rings true for firms hit by the MT4/MT5 deletion. They have the opportunity to take a broader look at their mobile operations, review their offering and think about what makes them different. In addition, despite the glitzy exteriors of retail broking apps, if under the bonnet the same technology powers all platforms, then there is little incentive for clients to choose their product as their platform of choice.
The retail trading market is fiercely competitive – clients of course want a reliable platform not prone to outages, but also functionality and accessibility they can’t get elsewhere. PWAs and platforms built in an open way will allow firms to consider and choose which elements of their stack they would like to own themselves to boost resilience but also to differentiate their platform. While building a bespoke tech stack might seem like a big undertaking, modern approaches to accelerated development significantly speed up time-to-market and mitigate delivery risk. These recent events also show the long-term prize is certainly worth the effort.
The MT4/MT5 issue has forced platforms to look in the mirror. The situation has raised fundamental questions beyond the simple replacement of select functionality – but shoring up the foundations on which they are built while taking back control of the speed of innovation and being able to respond faster than the market. Rather than being a thorn in the industry's side, the short-term headache could be the industry’s long-term gain as it shifts its perspective on the technology on which it is built.
Amanda Harrison is a Senior Sales Executive at Adaptive Financial Consulting
CFI Obtains Regulatory Approval for South African Operations
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
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#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
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20-22 MAY 2024
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Looking to expand your network in #Africa?
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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