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

Digital Assets

As SPAC bubble bursts, Circle terminates its $9 billion merger with Concord

USDC stablecoin issuer, Circle has terminated its planned $9 billion SPAC merger with publicly traded blank-check company Concord Acquisition Corp.

Institutional FX

Integral reports lowest FX volume in two years

Foreign exchange trading volumes dropped in November across Integral’s trading platforms as currency markets saw a relatively quiet period after consecutive months of strong trading activity.

Technology

CDEX: Avelacom announces connectivity to Cboe Europe Derivatives

“We anticipate that many of our customers from Asia will be particularly interested in getting exposure to pan-European products via just one venue, which CEDX offers.”

Retail FX

BUX acquires Spanish Ninety Nine’s retail brokerage unit

“Thanks to this acquisition, Ninety Nine users will have access to a wide range of services provided by BUX, such as investing in Spanish, European and US stocks, ETFs, cryptocurrencies, fractional investing and the BUX Savings Plan.”

Digital Assets

SEBA and HashKey partner to expand crypto in Hong Kong and Switzerland

SEBA Bank AG has announced a new strategic partnership with HashKey Digital Asset Group as part of both firm’s expansion efforts in Hong Kong SAR. 

Executive Moves

Broadridge appoints Martin Koopman as Chief Product Officer

“Martin has a proven record of driving product innovation both at Broadridge and at previous companies. His vision and proven ability to execute will be invaluable as we become the foremost SaaS provider to the financial services industry.”

Digital Assets

DAM rolls out Moonwalkers v1 testnet ahead of support for yield-generating collateral

“We want to champion innovation by making it easier to securely direct stablecoin liquidity away from Ethereum towards newer networks without the constant vulnerabilities posed by bridges. d20 will help accelerate the adoption flywheel of emerging networks, and this is our first step towards making our omnichain promise a reality.”

Institutional FX

FIA EXPO: ICE’s Brian Norris talks ESG investment, carbon credits and market data

The FIA Futures & Options Expo, now in its 38th year, convened the listed derivatives dealers, thought industry leaders and other stakeholders for two days of networking.

Retail FX

Malaysia regulator exposes OctaFX clone, shady FB profiles

Malaysia’s financial regulator today warned online investors about the risks of following investment tips made on social-media platforms.

<