“Mind The Gap!” – The life and times of a man on the move Episode 84

In this weekly series, I look back on what stood out, what was bemusing, amusing and interesting during my weekly travels, interesting findings within the FX industry and interaction with an ever-shrinking big wide world. This is purely observational and for your enjoyment

Spring has finally sprung, and here in London, in between the constant immersion in the world capital’s cultural overload that is the theater and classical music scene, probably the best in the world especially at this time of year, I have been able to make some interesting observations this week.

Standing out among this week’s events in particular was OANDA Corporation’s interesting advancement of its relationship with Ireland’s customer engagement company Chasing Returns.

Chasing Returns is an interesting organization, as it is led by Ann Hunt, who, rather than coming from the marketing or customer engagement sector as is the case with many of these ‘add on’ services which brokers use to boost customer lifetime value, Ms Hunt shares a similar background to myself, and to many other long termers in the industry, having spent 7 years at HP as a Senior Program Manager on the Bank of Ireland project, and some considerable time before that as Operations Manager at Changing Worlds, where she transitioned the firm from an R&D company to full service telecoms firm with a pan-European client base.

This technical understanding bodes well indeed, and no doubt Chasing Returns has a popular following among FX brokers, however OANDA’s love/hate relationship with this type of system is baffling.

I was particularly pleased this year when OANDA Corporation finally began to fix its Achilles heel, that being the company’s excellent product and service structure, but headless management and revolving door leadership approach.

For many years, the company has been headed up by no-names, people who have no provenance in our industry and have been here today, gone tomorrow, and in some cases, leaving a trail of destruction behind them.

Now, with proper management and a good structure at the top, the company looks to be in fine fettle. Senior FX executives such as Gavin Bambury and Lucian Lauerman have joined the fold, and the firm is taking London seriously as a talent pool for its experienced leaders.

At last.

However, given OANDA’s history with social trading, and yes of course, Chasing Returns is not social trading, but it does in some respects fit into the category of external products that are designed to keep traders online for longer and increase their lifespan with a specific company.

The question is, why is this necessary when OANDA spent an absolute fortune developing its own proprietary social trading system called fxUnity over 10 years ago, only to can the whole thing very shortly afterwards.

That was a fiasco indeed.

OANDA Corporation’s failed attempt at taking its fxUnity product to a wide audience over 8 years ago is a case in point. The company is a technological tour de force, yet it brought ruinous R&D costs into the boardroom when it canned the fxUnity proprietary social trading platform a very short time after launch, before then becoming embroiled in the catastrophic purchase of the Currensee social trading network for an absolute fortune, which was wound down and discontinued very soon after its acquisition.

Compare that to the self-directed traders that favor proprietary platforms and are experienced in navigating the markets electronically, and OANDA’s migration of 2,200 Tradestation users onto OANDA’s fxTrade platform in 2016 when IBFX exited the US market demonstrates that the same company could not engage traders on social platforms, but was absolutely able to benefit from the onboarding of astute, self-empowered traders who favor a high quality brokerage environment and proprietary platform.

One would imagine that with its own platform, and some very loyal clients, an eye on technology and quality rather than leads and churning, OANDA would be in a position to organically grow its business, especially now that it has some of the industry’s best management on board – the only component that it was previously missing – rather than retread the path that left wounds.

In its home market of North America, the company has very little competition. GAIN Capital is not in the same league, and IG Group has made a quiet start from its relatively new Chicago base after re-entering the US market, and FXCM, once OANDA’s bete noire, is in the weeds.

As I mentioned publicly in 2016 when OANDA’s contemporary CEO Vatsa Narasimha issued a degrading PR, jumping on the misfortune of FXCM in order to attempt to pick up its clients, this was an unnecessary cheap shot. Clients would have organically come to OANDA, because despite the good quality technology and trading environment, where else were they going to go?

Interactive Brokers had just decided that it wanted professional business and high deposit clients only, therefore FXCM’s US client base had only two choices, GAIN Capital or OANDA. Instead of mocking the competition, which is never a good thing to do, they could have got their own ship in order and watched the clients roll in.

OANDA claims that under this newly expanded collaboration with Chasing Returns, OANDA will offer clients around the world an extended suite of capabilities that utilise behavioural science research to help improve trading performance. The agreement further builds on the 2018 integration of Chasing Returns’ risk management technology into OANDA’s trading platform, which provided retail clients with access to the Trading Performance Management portal.

Couldn’t fxUnity have been evolved to do this on a proprietary basis? OANDA could then white label it and roll it out to other firms across the FinTech industry and hey presto, there you have a diversified product range to offer other companies, rather than just relying on retail leads.

When companies complain that it costs over $1300 to obtain a new client, it is worth bearing in mind that OANDA blew millions on the fxUnity and Currensee fiascos, both of which were tools to increase client retention.

Now, with expansion of its relationship with Chasing Returns, we can clearly see that the need for this type of engagement is still an issue within the company.

Go figure!

Wishing you all a super week ahead!