Engaging customers via technology: How to keep costs down and increase LTV

One of the most important concerns among retail FX brokerages is how to ensure that they keep their existing traders engaged without having to expend endless resources on the often laborious task that is customer retention.

Currently, customer acquisition costs are at an all-time high, at between $1,000 and $1,300 per new client, and with low margins and the high cost of ensuring that partners are remunerated keenly, as well as operational expenses, ensuring that all important customer loyalty is perhaps more essential than many revenue-driving factors within today’s retail FX brokerage.

Today, FinanceFeeds met with Ophir Schultz, Regional Sales Manager for North America at FinTech company Tradency, in order to gauge this from the inside.

Constantly speaking to brokerages when looking at their technology, Mr. Schultz has a great understanding of what brokerages are looking for these days with regard to customer engagement via technology, and how platforms and the services provided by third party vendors and platform providers themselves must provide integrated solutions to ensure that traders are engaged automatically.

Mr. Schultz spoke about how essential automated systems are in today’s environment, as machine learning begins to be a vital part of the modern electronic trading infrastructure.

What if, for example, a copy trading platform automatically switches traders to new strategies to stop them from remaining with an unsuitable strategy, therefore reducing cost to broker and maximizing lifetime value

Retail FX firms can reduce their staff costs and operational size by automating procedures that are inside platforms.

“In the last couple of years we are experiencing a great change in the retail FX market. There is an unmistakable shift towards improving the conversion funnel and much more focus is placed on bettering client onboarding and client journey” explained Mr. Schultz.

“It seems the market is shrinking, leaving the small unstable players behind and moving forward with the big boys that are constantly looking for the next best thing. Client engagement is the buzz word of current days and automation tools are the enablers. Previously, automation technology providers, brought to the market a “bank” of strategies, flooding the market with sometimes irrelevant information” – Ophir Schultz, Tradency

Mr. Schultz continued “Many traders today, similarly to everyone else nowadays, are short on time and patience. People do not have the time or the desire for in-depth learning of the market positioning and current trends. Today brokers and technology providers understand they need to provide the customer with concise, personalized, dynamic information.”

In terms of looking at customer engagement, Mr. Schultz said “As an example, our new RoboX is a service that was introduced to the FX retail market recently, that successfully puts these insights into practice. With RoboX things are clear, simple and swift. Within a minute the trader becomes active, having answered a few simple questions that were processed by an algorithm and risk engine to offer straight forward portfolio with only the most suitable strategies.”

“The trader’s portfolio is updated automatically to stay in line with the chosen risk level, personal trading preferences and the changing market conditions. I sometimes think of RoboX along similar lines to an iPhone” said Mr. Schultz.

“A system that engages customers constantly and automates parameters that keep them engaged has to look simple on the front end, this way customers will find it user friendly and not be bombarded by all the technology in the back that makes it all possible. Most brokers invest lots of time on client acquisition. Sales executives within brokerages have to explain how the trading platforms work which is very time consuming” – Ophir Schultz, Tradency

“RoboX maximizes the sales person’s working hour. At the same time that it may take to guide 1 new trader, a sales person can activate 4-5 new RoboX traders” he concluded.