FCMs ramp up spending on technology to edge amid fierce rivalry between derivatives firms.
Derivatives giants invest in consolidation and resilience to fend off non-bank rivals.
Facing
intensifying rivalry and fee pressures, major players in listed derivatives
markets are ramping up investment in front-office technology to bolster
operational resilience and gain a competitive edge, according to a new report by Acuiti.
Competition Heats Up in
Derivatives Markets, Driving Tech Investment
Acuiti's study titled "State of the Market: FCMs Front Office", produced in partnership with Broadridge, surveyed senior executives from 38 leading futures commission merchants (FCMs). It revealed that while competition
in clearing has remained relatively stable over the past five years, trading
and execution have seen a significant uptick in rivalry and fee compression.
Currently,
the heightened competition stems primarily from other sell-side firms. However,
the landscape is expected to shift as non-bank liquidity providers expand their
reach into listed derivatives markets.
In
response, FCMs prioritize customer service and channeling more resources into
front-office technology upgrades, with around half of the firms increasing their
tech budgets this year. The investment is focused on two core areas:
consolidation and efficiency, and operational resilience.
"Competition
has been intense among sell-side execution in derivatives markets, resulting in
significant fee compression," said Ross Lancaster, the Head of Research at
Acuiti. "With little room left to cut fees, FCMs are seeking to
differentiate themselves through customer service and technology. Investment is, therefore, being focused on both creating efficiencies and enhancing the
offering to clients."
Consolidation and Data
Integration Fuel Efficiency and Customer Service Goals
More than
half of the FCMs plan to consolidate front-office order management system (OMS)
technology across asset classes. Budgets are being allocated to build
backup processes to address operational resilience concerns and meet the
upcoming Digital Operations Resilience Act requirements in the European
Union.
The study has highlighted that data integration between systems and technology remains
a key challenge for firms as they strive to improve straight-through processing
and reduce manual intervention in the trade lifecycle.
"Front-office
investment for FCMs is providing them with a competitive edge in an
increasingly competitive marketplace," said Ray Tierney, the President of
Broadridge Trading and Connectivity Solutions. "This study found that FCMs
were seeking to achieve operational efficiencies through the consolidation of
technology stacks and to compete on their levels of customer service."
Tierney
emphasized that overcoming data fragmentation between systems is central to
both goals, enabling FCMs to provide more insight to clients while enabling
more efficient operations.
The report
revealed that 45% of FX trading firms are planning significant enhancements in
their operations within this asset class, with a strong interest observed
in equity options, indicating a bullish outlook for 2024. In contrast, cash
equities are witnessing a decline, particularly in Europe, where many firms are
looking to reduce their stakes.
Furthermore,
Acuiti published a report last week highlighting a significant shift in the European
retail FX/CFDs industry. According to the study, 92% of companies surveyed
express concern over their future amidst growing regulatory pressures.
The report
noted that European retail brokers must now reveal the percentage of clients
who incurred losses trading CFDs in the past year, generally between 70% and
80%. Research indicates that the average retail investor lost €2,680 trading
CFDs between June 2017 and June 2018, a finding corroborated by more recent
studies from Finance Magnates Intelligence.
Facing
intensifying rivalry and fee pressures, major players in listed derivatives
markets are ramping up investment in front-office technology to bolster
operational resilience and gain a competitive edge, according to a new report by Acuiti.
Competition Heats Up in
Derivatives Markets, Driving Tech Investment
Acuiti's study titled "State of the Market: FCMs Front Office", produced in partnership with Broadridge, surveyed senior executives from 38 leading futures commission merchants (FCMs). It revealed that while competition
in clearing has remained relatively stable over the past five years, trading
and execution have seen a significant uptick in rivalry and fee compression.
Currently,
the heightened competition stems primarily from other sell-side firms. However,
the landscape is expected to shift as non-bank liquidity providers expand their
reach into listed derivatives markets.
In
response, FCMs prioritize customer service and channeling more resources into
front-office technology upgrades, with around half of the firms increasing their
tech budgets this year. The investment is focused on two core areas:
consolidation and efficiency, and operational resilience.
"Competition
has been intense among sell-side execution in derivatives markets, resulting in
significant fee compression," said Ross Lancaster, the Head of Research at
Acuiti. "With little room left to cut fees, FCMs are seeking to
differentiate themselves through customer service and technology. Investment is, therefore, being focused on both creating efficiencies and enhancing the
offering to clients."
Consolidation and Data
Integration Fuel Efficiency and Customer Service Goals
More than
half of the FCMs plan to consolidate front-office order management system (OMS)
technology across asset classes. Budgets are being allocated to build
backup processes to address operational resilience concerns and meet the
upcoming Digital Operations Resilience Act requirements in the European
Union.
The study has highlighted that data integration between systems and technology remains
a key challenge for firms as they strive to improve straight-through processing
and reduce manual intervention in the trade lifecycle.
"Front-office
investment for FCMs is providing them with a competitive edge in an
increasingly competitive marketplace," said Ray Tierney, the President of
Broadridge Trading and Connectivity Solutions. "This study found that FCMs
were seeking to achieve operational efficiencies through the consolidation of
technology stacks and to compete on their levels of customer service."
Tierney
emphasized that overcoming data fragmentation between systems is central to
both goals, enabling FCMs to provide more insight to clients while enabling
more efficient operations.
The report
revealed that 45% of FX trading firms are planning significant enhancements in
their operations within this asset class, with a strong interest observed
in equity options, indicating a bullish outlook for 2024. In contrast, cash
equities are witnessing a decline, particularly in Europe, where many firms are
looking to reduce their stakes.
Furthermore,
Acuiti published a report last week highlighting a significant shift in the European
retail FX/CFDs industry. According to the study, 92% of companies surveyed
express concern over their future amidst growing regulatory pressures.
The report
noted that European retail brokers must now reveal the percentage of clients
who incurred losses trading CFDs in the past year, generally between 70% and
80%. Research indicates that the average retail investor lost €2,680 trading
CFDs between June 2017 and June 2018, a finding corroborated by more recent
studies from Finance Magnates Intelligence.
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
FX Volatility Impacts Q1 Revenue of Compagnie Financière Tradition
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
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
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
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
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
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
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
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
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
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.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
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.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
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.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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.
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.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
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.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔