Industry Perspective: Four keys to a prosperous FX business, and a clear exit strategy

The foreign exchange industry continues to see the emergence of new brokers, technology companies, and market structure innovation. Finance Feeds spoke recently with principals at Shift Forex about the important ingredients brokers, banks, venues, exchanges and technology providers must consider when entering or seeking to expand in the foreign exchange markets. Shift Forex is a […]

The foreign exchange industry continues to see the emergence of new brokers, technology companies, and market structure innovation. Finance Feeds spoke recently with principals at Shift Forex about the important ingredients brokers, banks, venues, exchanges and technology providers must consider when entering or seeking to expand in the foreign exchange markets. Shift Forex is a New York based consultancy that works with companies at any stage of their lifecycle, from their inception until sale.

Ian MacAfee, CEO, Shift Forex

Effectively starting up, fostering growth and eventually exiting a forex business requires a thorough knowledge of how the market operates. Here are four tips for prospering an FX business.

Start with a Solid Strategy

Forex brokerage and technology are highly saturated segments of the market. For that reason it is crucial for emerging companies to differentiate themselves significantly from competitors. Developing a robust value proposition and implementing it through an entire product offering can put a new company ahead of competitors, enabling them to get an initial jump on legacy providers and increasing the chances of success and growth.

“In the brokerage segment, clients find value in our turn-key solution,” says Ian McAfee, CEO of Shift Forex. “In addition to being a single point of contact for legal, technology, finance, and marketing services, we naturally build strong relationships with our clients to help them with less known aspects of the industry and optimize for success.”

Avoid Common Mistakes

Companies who are successful in forex have the foresight to anticipate industry challenges. “Many people coming into the industry do not have experience running a broker, so they run into questions about things they have never had to deal with. We’re there to help them when those issues arise,” says McAfee.

The companies that fail tend to do so in one of these three areas: they don’t handle their risk properly, they don’t pick the right marketing strategy to attract new clients, or they try something on the technology side that is too costly to maintain. In order for companies to avoid mistakes, it is crucial for them to think long term when making preliminary decisions in these areas.

Matthew Miller, COO, Shift Forex

Maintain a Strategic Perspective

At various stages of development, companies will either look toward expansion into new market segments, geographies or products. They also face strategic business questions around acquisitions. Whether driving expansion through strategic acquisitions or seeking offers to sell the company, important decisions will need to be made, such as whether to take the company public or sell it outright.

Mergers, acquisitions and initial public offerings are related strategies, but each is fraught with extensive financial, regulatory, and cultural considerations that will determine the future of a company. “The FX industry has unique characteristics that mean many traditional capital sources are not available,” says Director of Strategy and Valuation at Shift Forex, Greg Berman, “so anyone considering expansion via investment must seek advisors who truly understand the landscape.”

Plan a Comprehensive Exit Strategy

When companies look to exit the market, it is crucial to find an acquirer that understands the full value of the target company’s products, services, and market position enabling them to expand the acquired business to new levels of success.

“Valuing a company goes beyond comparisons, numbers, and multiples,” says Matthew Miller, Chief Operations Officer at Shift Forex, “it’s about going to the market and finding out what someone is actually willing to pay for a company. We can utilize our network to get an informed and accurate sense of a company’s worth in the market.” This 360-degree analysis is as important to the success of a transaction as the financial valuation and deal terms that define an acquisition.

The key to a successful forex business begins and ends with an in depth understanding of the foreign exchange industry. “There are plenty of top-tier consulting firms out there,” says Miller, “however, without a FX specialization, these firms are often unable to provide deep, industry-specific insights, which can spell the difference between success and failure to a company entering this space.”

Shift Forex offers full-service, market entry consultation, marketing strategies, and mergers and acquisitions services to companies at any stage of growth. The firm is headquartered in New York with offices in London and Shanghai.

Read this next

Digital Assets

Himalaya Exchange customers seek release of frozen funds from DOJ

FormerFeds, a corporate defense and litigation service provider, has filed a lawsuit against the U.S. Department of Justice (DOJ) on behalf of over three and a half thousand Himalaya Exchange customers.

Digital Assets

Nubank, Circle, and Talos join forces for crypto adoption in Brazil

Nubank, the Brazilian neobank backed by Warren Buffett’s Berkshire Hathaway and Softbank Group Corp, announced new partnerships with cryptocurrency firms Circle and Talos.

Metaverse Gaming NFT

Flare onboards Ankr, Figment, Restake, and NorthStake as validators

Flare, an EVM smart contract platform known for its focus on blockchain data utility, has announced a major step in its development. The platform has onboarded leading infrastructure providers, including Ankr, Figment, Restake, and NorthStake.

Digital Assets

Sui Joins DeFi Leaders, Topping $100M in Bridged USDC

Sui, the groundbreaking Layer 1 blockchain created by the technology experts who led Meta’s Diem blockchain initiative and created the Move smart contract language, continues its explosive ascent in decentralized finance (DeFi). This week, it surpassed $100 million in bridged USDC. 

Digital Assets

Poloniex hit by UK regulator, listed as ‘unauthorised’ exchange

The UK’s Financial Conduct Authority (FCA) has added the cryptocurrency exchange Poloniex to its warning list of non-authorized companies. Poloniex, which is based in Seychelles, has experienced four hacks in the last two months and is affiliated with entrepreneur Justin Sun.

Industry News

Exclusive Markets is Proudly ISO/IEC 27001:2013 Certified by MSECB for Unparalleled Commitment to Information Security

Exclusive Markets, a leading name in the FINTECH sector, proudly announces the attainment of ISO/IEC 27001:2013 Certification by the MSECB. This esteemed certification highlights Exclusive Markets’ persistent commitment to fortifying information security within its cutting-edge trading technology. 

Digital Assets

SEC is discussing ‘technical details’ of Bitcoin EFTs ahead of approval

Discussions between the U.S. Securities and Exchange Commission (SEC) and asset managers seeking to list Bitcoin exchange-traded funds (ETFs) have reportedly advanced to key technical details.

Digital Assets

Versatus Labs Reaches $50 Million Valuation Following $2.3 Million Seed Funding Round

Versatus Labs, a peer-to-peer web services protocol aiming to help Web2 developers transition to Web3, has completed a $2.3 million funding round at a $50 million valuation led by key investors in the Web3 space including NGC Ventures and Republic Crypto. The latest funding round aims to help the company develop the ‘world’s first stateless roll-up’, Versatus LASR. This follows Versatus Labs’ recent pivot from Layer 1 solutions to Ethereum scaling solutions. 

Digital Assets

Binance ex-chief’s sentencing looms as court accepts his guilty plea

A U.S. district judge has accepted a guilty plea from former Binance CEO Changpeng Zhao (CZ) on charges related to anti-money laundering violations. The plea was accepted by Judge Richard Jones in the U.S. District Court for the Western District of Washington in Seattle.