The challenges and strategies behind a broker’s product – An interview with Trevor Young, VP of Product Management at OANDA
FinanceFeeds reporter Ricardo Esteves today spoke in detail to Mr. Trevor Young, Vice President of Product Management at OANDA Corporation about the hard decisions a broker has to make in order to offer a product that meets every trader’s demands, from a multi-channel experience to a personalized platform, while providing deep liquidity and low-latency execution […]
FinanceFeeds reporter Ricardo Esteves today spoke in detail to Mr. Trevor Young, Vice President of Product Management at OANDA Corporation about the hard decisions a broker has to make in order to offer a product that meets every trader’s demands, from a multi-channel experience to a personalized platform, while providing deep liquidity and low-latency execution in an industry where Fintech partners are rarely exclusive.
OANDA provides the proprietary fxTrade and the off-the-shelf MT4 platforms to clients, what is the value proposition of each?
The MT4 platform has a very broad and established base of FX traders globally. The two things that have made it successful is a (previously) very low cost structure which made it easy for small brokers to launch a solution, and they were one of the first to provide a platform for automated trading that was suitable for a retail customer.
The platform itself feels a bit dated when you look at the experience of their flagship windows terminal, and they’ve alienated alot of the partner ecosystem that used to build on top of the platform by keeping it closed and competing directly with those that were showing signs of success.
“I think MT4 will continue to be relevant for a long time, but I see it slowly losing ground vs. alot of the new and innovative platforms on the market” – Trevor Young, VP Product Management at OANDA Corporation.
With OANDA’s fxTrade platform we have focused alot of our platform efforts recently on mobile and cloud. Being one of the first brokers to launch a full featured mobile trading app, we aim to keep a leadership position here and continue to invest in a strong mobile experience. We offer all the same functionality you can get from our desktop platform in our SmartPhone and Tablet applications and we are constantly improving the interface and adding new features.
On the flip side, we have invested in building an Open API that makes it easy for both automated traders to build custom tools and strategies on, as well as offering partners a way to build new and innovative applications on top of our trading engine.
The core value proposition with this approach is that we know different traders have different needs. We want to make sure that we have a robust suite of products that we can offer to both new and inexperienced traders as well as professional and sophisticated traders. Some of these tools will be proprietary, built by OANDA developers while others will be built in conjunction with partners. In addition to the trading platform itself, we are aggregating market data, educational content, analyst reports and much more, that can be assembled into a client hub and accessed from a variety of channels.
What are the upsides and downsides in regard to your own experience?
Our previous approach (and the approach that I see most brokers take) is trying to build a single platform that caters to all customers. It’s usually a windows based application that packs in every feature you can think of, with some options to configure the windows so that it suits your style. I think this has been the wrong way to think about it. If you consider the trading needs of a professional trader vs somebody who is brand new to Forex, they are very different.
Even if you focus on a single customer segment like pro traders, how they use their desktop platform is very different than how they use their mobile platform.
Furthermore, somebody who has a currency only swing trading style vs. somebody who has a multi-asset automated intraday strategy want very different things from a platform, despite belonging to a similar ‘pro’ segment.
The approach we are taking is to make sure we cover all the needs of the different types of traders globally through a combination of proprietary and partner platforms. OANDA will continue to focus our engineering efforts on the things we are really good at, like efficient execution and an intuitive mobile experience, and establishing an ecosystem for our trusted partners to build on and target some of the niche products.
The downside is that partners are rarely exclusive, and so they can offer the same product through other brokers, which means it’s harder to differentiate your offering. But the advantage of having a large engineering team allows us to focus more on the overall customer experience and the improving the various touch-points across multiple channels. We don’t necessarily have to build all the components ourselves, but we can still control the overall experience.
What is your current strategy, and why do you follow it?
This is mostly described above. We will continue to focus on the mobile experience and expanding our API capabilities to build a trusted partner ecosystem, which allows us to focus on recommending the best mix of products and features specific to different customer’s needs. The reason we are following this strategy is because we recognize that across our global base of customers we have identified very distinct needs, and we should provide distinct experiences for them.
We also recognize that in some areas, our partners have been able to produce innovative platforms or services that we have not been focused on. So rather than re-invent the wheel we are looking to partner strategically to fill some of those gaps. Our strategy is to focus on the overall, multi-channel experience and provide a personalized platform unique to each trader. If we do that well, combined with our deep liquidity and low-latency execution, we think we can offer the best solution around the world.
Do you plan on changing your strategy in the future; what would be the reason for the change?
We currently have no plans to change, but we monitor market activity and technology advancements very closely. We will continue to experiment in areas we think might help our customers have a better experience. We will continue to expand our partner ecosystem while building out proprietary solutions on key channels, but I don’t think we will change our current strategy anytime soon.