FMLS 2022: Finalto’s Paul Groves on providing NDFs, ETFs, other in-demand assets

Rick Steves

As part of our coverage for the Finance Magnates London Summit 2022, we spoke to Finalto’s Head of European Sales, Paul Groves, to find out how brokers can position themselves to tap into the new market landscape.

FMLS 2022

Paul has been with Finalto since 2010, tasked with running the sales teams that cover liquidity, risk management and its 360 technology stack. His broad resume includes 35 years working for top financial service businesses in London. Following a 13-year tenure with Finalto, Paul’s insider perspective makes it easier for him to pick up on potential areas of improvement.

Reflecting on the trading solutions that Finalto has to offer as we speak, the long-serving executive said they are pretty unique in that the company offers multiple products under a single-entry point.

More specifically, Paul explains that Finalto boasts a wide range of services and solutions to create the perfect technology proposition for a brokerage business. That includes a complete end-to-end solution consisting of front-end platforms, back-office administration, risk management tools, pricing tools and enhanced connectivity.

“Built by in-house experts, our proprietary and award-winning technology facilitates multi-asset cross-margining and allows us to tailor the technology to specific client needs. Our technology directly interfaces with ClearPro, ClearMobile, ClearWeb and FIX API as well as MT4 and MT5. Platforms can be white labelled, meaning whatever system you are using, Finalto has a solution for it.”

Finalto, he adds, is devoting attention to offering clients the flexibility to opt for a full suite of services or to select any individual component to strengthen their existing capabilities.

According to Paul, Finalto supports MT4 and MT5 platforms, the de-facto industry standards for multi-asset trading within the retail FX segment. There is also ClearPro, their proprietary downloadable trading platform for professional traders.

Meanwhile, ClearWeb is Finalto’s cloud-based trading platform that can be accessed from any browser and ClearMobile is a mobile app that brings all of its advanced technology to the user on the go.

Paul also highlights their recent push for Finalto Trade, the retail orientated trading platform that enables users to optimise the way they trade through its customisable interface, multi-asset web and mobile platform and advanced back office dealing tools.

Finally, their flagship Finalto360 is an end-to-end broker solution available on SaaS subscription basis or a fully deployed basis, based on the customer’s preference. Finalto’s proprietary technology enables partners to efficiently onboard, retain and boost customers’ trading activity. It offers a CRM, connections to PSPs, marketing, compliance and reporting tools all connected to Finalto’s white labelled trading platform.

“Finalto provides a range of platforms. We offer the existing CFH Clearing platforms, which are probably more angled at the institutional market. As part of the TradeTech ecosystem is our Finalto360 tech stack. Finalto Trade is also a very retail-oriented platform that comes with the obligatory mobile application. We can talk about the many platforms we offer, the ins and outs of each solution, but I think more importantly is that the offering really suits different sorts of client genres. And that’s really where we’re focusing.”

Turning to Finalto’s liquidity product, the company has been named Best B2B Liquidity Provider (Prime of Prime) at the Finance Magnates London Summit Awards 2022. Paul believes that being awarded this prestigious recognition is testament to the hard work Finalto has invested into its market-leading liquidity.

“We pride ourselves on the product we offer to clients, so we’re pleased to win this award. We are very thankful to those who voted for us. The teams at Finalto put in a lot of hard work to ensure our liquidity remained robust through the volatility in 2022. We’re excited to take it to the next level in 2023.”

Finalto, and Finalto 360, were also nominated in award categories with much consideration on the technology that backs the platform, the type of service rendered, and how satisfied customers find the service.

“Any award is a culmination of a lot of time and effort, and more importantly, a recognition by our market participants, which is just fantastic for us. The liquidity pool has gravitated over the course of years. Naturally, as most providers, we started off with FX and bullion, and then we grew into indices and other assets. The equities have come in in the last couple of years. And then we’ve gone slightly away from the mainstream instruments, having added NDFs on FX, crypto, and base metals, soft commodities and ETFs. So, I think we have a very good range of products.”

Interestingly, Paul noted that while traditional retail brokers remain their bread and butter but with the growth of their offering, Finalto is also servicing a more diverse range of clients than ever – high net worth individuals, fund managers, hedge funds, banks, family offices and prop houses.

Asked about how Finalto drew on its long expertise to take a step ahead and provide a true multi-asset offering, Paul elaborated on how they provide unrivalled liquidity and prime broker solutions, enabling their clients to access over 800 instruments across: FX, precious metals, base metals, single stock and index CFDs, cryptocurrencies and energies through one cross-margined account.

“The term multi asset is really appealing to a lot of our clients given the fact that they can trade all of these products in one account. So, we don’t have to split any instrument of interest. You can trade equities in the same account you trade indices, FX, bullion, cryptos and much more. So, it’s a true multi asset offering. Also, if there’s a viable business case to go and source, or another asset class, or even an additional product within an existing asset class, we will look at it.”

FinanceFeeds was curious to ask Paul if he sees a genuine demand on the retail side for their non-deliverable forwards (NDFs) product.

Paul draws a clear parallel between the experience in which clients have struggled with the NDF complexities, and how Finalto takes this out with a revolutionary offer that does away with the product’s associated issues.

To tackle the problems that made it difficult to trade NDFs, Finalto is providing a streamlined forex solution that can slot smoothly into any existing infrastructure without their commonly associated headaches.

The addition of the NDFs is further evidence that Finalto listens to the needs of its customers and adds assets where there is demand, Groves noted.

“It’s probably fair to say that the complexities of NDFs have caused large parts of the retail market to miss out on trading opportunities. We’ve abstracted some of those complexities to allow seamless integration into existing systems and offerings. So, it’s pretty much a simplified NDF product. We’re as always bringing new products on, but only after making sure the client understands the metrics of it. Naturally, it doesn’t seem like a pure spot product, but it’s one of these things that we’ve always had a lot of demand for.”

Exchange-traded funds (ETFs) are growing in popularity because of their simplicity, cost-effective approach to investing, and the diversity they provide.

But where exactly Finalto’s ETF product stands now and where is headed in the future, and what are the trends we should watch out for, Paul said they are “still in a pretty early stage yet.”

“We’ve got around 10 different products that we’re offering out there. Coming from an FX and Bullion background, I would never claim to be an ETF expert, but luckily, we do have ETF experts within the company. Although we don’t see massive demand for ETFs, we didn’t wait for a big demand to pent up. We actually said, okay, there is interest out there, so let’s stimulate the interest ourselves with this one as well, a bit like NDFs, to push that out to the market space.”

“We’ve always been putting products out there. The retail client needs to go to the retail broker to demand that product. So, generally speaking, that is the route when you get things built up on the first tier of the clients. So, the primary interest gets generated from the broker. That’s when we, as a prime liquidity provider, have to step up the plate, source the product and get it down there.”

Finalto has been crowned the winner of several awards this year thus far, showing clear evidence that the brand has strong appeal and influence within the industry.

Speaking about that, Paul said that each award is issued with much consideration on the technology that backs Finalto platform, the type of service rendered, and how satisfied customers find their products. These prestigious awards also honor the Finalto entire team for always going above and beyond to maintain the same high standards of service in this dynamic environment, he states.

“Everyone likes to win an award. It’s pretty fair to say that we look at it in two ways. Overall, the recognition acknowledges excellence in our market space. But indeed, every award is a culmination of a real group effort within Finalto, from the risk team, the trading team, the sales force, the client services, to the onboarding and finance and all the other departments involved.”

Towards the end of our conversation, we asked Paul about the key themes he saw in 2022? And what does he expect to happen as we get into 2023?

Paul said that risk management has been a top priority for the brokerage industry, and 2023 will be no different. Because trading operates with a relatively high degree of leverage, the potential risks are magnified compared to other industries. And although the issue of margin is pivotal, the set of risk mitigation procedures includes other equally important aspects.

Paul even believes that how effective a broker manages its own risks can be the difference between success and failure.

“It’s always going to be having a robust, efficient risk management system. Whether you are a broker, a prop house, or even an individual trader, you have to ensure to always trade within the safest possible environment. We have seen some pretty vicious moves this year, which it’s not going to stop.”

Paul also emphasizes on the importance of continuously identifying and monitoring risks related to other business parameters, to proactively handle potential problems that may cause a threat to the broker and its customers.

“I think a lot of brokers are realizing that they do need a buffer, just as their clients need it in their accounts. Generally speaking, most of the brokers we deal with are regulated. So, there is obviously an obligation to have a decent risk management system in place. But I think that the market has considerably matured over the last few years. And quite frankly, if you haven’t got robust risk management after everything we’ve all been through, probably you are not going to survive much longer. Or you might already be out of business now.”

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