Inhouse Development, Bespoke Software or Turnkey Solutions for brokers

FinanceFeeds Editorial Team

What should brokers consider when the fintech market offers several similar solutions from different providers?

Oftentimes it’s difficult for brokers to decide which technology provider to choose, even if they know what kind of solution the brokerage needs. The fintech market may simultaneously offer several seemingly similar solutions from different technological providers. The price cannot be a deciding factor, especially when it comes to comprehensive products like investment systems, including investment systems, liquidity bridges, or large risk management solutions. Then what should brokers pay attention to, and how can they choose the most suitable solution that covers their unique needs and strengthens the business?

One of the ways to choose a provider is to look at how exactly they develop the product. Developers may be divided into two general groups.

The first are those who offer technology with rigid pre-installed user scenarios. While this may simplify the broker’s operational process and make it clearer, it lacks customization of features. This may lead to a situation where  the solution doesn’t accurately integrate with the broker’s infrastructure and is unable to cope with sophisticated issues.

The second group of technology developers creates products with comprehensive functionality and greater flexibility in their settings. However, the more complex the solution becomes, the more difficult it is for brokers to manage and maintain it by themselves.

This implies three key scenarios, how exactly a broker may get the desired technology.

David Nussbaum, CEO of SkaleCRM, shared his opinion on the topic, “As a CRM provider for online brokers, we often see that choosing a technology solution boils down to how much time and resources a broker would like to invest when setting up and maintaining their CRM system. Brokers will generally be looking for one of 3 solutions; an out of the box solution with little setup and almost zero maintenance to get their business going, a plug and play solution that allows customization as their business develops or to develop parts of the solution themselves once they are focussed on providing a unique trading experience. At Skale we believe in providing technology that enables our customers to scale and grow their business. We felt that in order to achieve this we needed to provide technology to address these different types of brokers needs.  The Skale CRM can be used with very little setup and maintenance effort, with the ability to be highly customized with our plug and play marketplace and to allow for custom developments and integrations.” 

In-house and bespoke development

Certainly, solutions developed directly for the broker’s needs in most cases are more effective than others, but they also have some significant disadvantages. Building such a solution will require a lot of time and resources from both the provider and the broker, so these are usually quite long and expensive processes.

Rigid ready-made technology for brokerages

A good alternative to in-house development is acquiring a solution already existing on the market. This approach allows brokers to save funds and get a ready-made tool designed to cover their needs. Such products are  the most effective  in covering one unique issue. For instance, it may distribute bonuses to agents for each newly registered trader. Yet, in a situation with more complex tasks, this approach will not work. When an inflexible solution is faced with a bigger issue involving several technical processes, the system inevitably faces difficulties. So the broker will either have to accept the limited capabilities of the tool or look for another product. 

Flexible technology with extensive customization

Finally, brokers can opt for a provider that balances between configurational freedom and the manageability of the solution. Often such solutions are already presented on the market, and offers with them are accompanied by technical support from the provider, gift hours for custom modification of the product, or the possibility of technological consultations.

This approach is especially relevant  to large systems such as PAMM and Social Trading. Their performance involves a lot of processes, including customer attraction, interactions between traders, funds transfer, etc.  Hence, it is crucial to configure these systems in the way they operate conveniently for all departments of the brokerage: from the dealing department to the customer support and accounting.

Cooperating with providers who offer turnkey technology, brokers receive comprehensive products covering their needs and the long standing expertise that the provider gathered in its interaction with many other companies. This experience, coupled with elaborated market research,  helps the provider to predict which functionality will occur to be demanded in the nearest future and include it in the product. Therefore, with the use of such products, brokers will keep their businesses equipped with the most relevant technologies.

“Choosing a technology usually might feel like a compromise between your great vision and available functionality. One might argue that going for bespoke development would solve the problem, but for the majority of companies developing a desired tech suite is an impossible project as it takes years of research and tweaking to get it just right.”, commented Anton Sokolov, Marketing Manager at Brokeree Solutions. “My advice here is to look for a turnkey solution that nails its core functionality and lets you build on top rather than going for what might seem an all-in-one system (which is usually too complicated for fine-tuning and forces you to implement it in a certain way). For example, Brokeree’s flagship products come with the REST API that is used by brokerages to introduce new interactive experiences in the form of mobile and web applications. When they need a widget to promote a specific trader on their website, they can use our inbuilt tools for quicker implementation, but alternatively they can pull that data via REST API and showcase it with their custom designs to provide customers with an ultimate brand experience.”

Read this next

Retail FX

Weekly Roundup: John Oliver rips into MetaTrader, Binance to pay $10 billion

Welcome to this week’s roundup, where we delve into the latest developments in the Forex, Fintech, and cryptocurrency markets. Stay ahead of the curve with our comprehensive overview of the week’s most impactful events and trends across these dynamic sectors.

Retail FX

Lark Funding reopens to US traders, MyFundedFX picks cTrader

Canada-based prop trading firm Lark Funding announced it will once again welcome clients from the United States.

Institutional FX

Cboe FX volume falls to lowest level since summer

Cboe’s institutional spot FX platform, known as Cboe Spot, today announced its trading volume for the month ending February 2024, which took a step back after a strong rebound in December.

Retail FX

ThinkMarkets secures lucrative DFSA license in Dubai

Melbourne-based broker ThinkMarkets has secured a license from the Dubai Financial Services Authority (DFSA) after it has already incorporated its new subsidiary in the Dubai International Financial Center (DIFC).

Digital Assets

New Horizen Lays Out Its Vision Of A Modular, Proof Verification Layer For Web3 Networks

Horizen is forging a new path for the future of blockchain with its New Horizen initiative, which is building a modular Proof Verification layer that’s dedicated to verifying cryptographic proofs for any settlement layer, beginning with Ethereum. 

Digital Assets

Karma3 Labs Raises a $4.5M Seed Round Led By Galaxy and IDEO CoLab to Build OpenRank, a Decentralized Reputation Protocol

Using OpenRank, developers and web3 companies can build consumer apps where people can discover, use, fund, read, or buy something on-chain without worrying about getting spammed or scammed.

Digital Assets

Worldcoin down as Elon Musk sues OpenAI CEO Sam Altman

Worldcoin’s (WLD) token dropped following news of a lawsuit against related company OpenAI. The lawsuit was filed by Elon Musk and accused OpenAI and CEO Sam Altman of breach of contract.

Institutional FX

Exegy’s Liquidity Lamp adds intraday data to outperform S&P 500 by 31.8%

Exegy has incorporated intraday signals into its AI-powered iceberg order detection tool, Liquidity Lamp. By adding intraday data to a baseline mean reversion strategy, Exegy’s model outperformed the baseline by 10.5% and the S&P 500 (SPY) by 31.8%, respectively in the out-of-sample testing.

Industry News

Think Elon Musk backed your crypto exchange? ASIC’s latest reveal may shock you

In an absolutely shocking turn of events that nobody could have possibly seen coming, the Australian Securities and Investments Commission (ASIC) has bravely stepped forward to reveal that, yes, those videos of Elon Musk passionately endorsing a cryptocurrency exchange are as fake as a three-dollar bill.