OSYSTEMS’ COO / Advocate Keith Isaac: brokers can work smarter, cleaner and more compliant.
The problem lies in the competitive environment and high cost of acquisition facing brokers today. The solution lies in automation according to OSYSTEMS’ COO and Advocate Keith Isaac.
The writing is on the wall with CySec Chairman Demetra Kalogerou’s recent dressing down of the entire FX, CFD and Binary Option’s industry in Cyprus.
Whilst history has shown, it’s appears that only a few brokers are the main culprits; Demetra Kalogerou’s speech makes clear that changes are in the pipeline and brokers will need to comply with stricter standards or risk loosing their licenses.
But when you analyze where many of the problems start, you quickly conclude that it’s in the advertising, sales and conversion process that expectations are set client side.
It’s the sales process that does the most damage to the relationship between trader and broker long term with aggressive sales pitches and or misleading perceptions of riches to be made, that hooks the traders in.
Post conversion, it’s a race to get as much as possible out of the trader before the end of the trader’s short life cycle. This leads to a continued cycle of churn and burn, with the traders being the ones getting burnt.
How can this be changed? How can the industry remove this element that almost sets itself up for failure long term? The answer lies in automation according to OSYSTEMS’ COO and Advocate Keith Isaac.
FinanceFeeds and Keith Isaac sat down to discuss how the industry can move forward working smarter, cleaner and more compliant using their latest technology, OSYSFX.
CySec Chairman Demetra Kalogerou made it very clear that the current status quo cannot continue. Before the meeting many retail FX/ CFD and Binary Option brokers were extremely concerned as no one had a clue what she would be announcing or discussing. What is the vibe on the ground?
The general vibe on the ground here in Cyprus is realistic. Many brokers we’ve spoken to understand that things need to change. Whilst Demetra Kalogerou’s speech made clear the intentions of CySec, I believe that many of the issues faced by brokers are due to the high cost of acquisition and competition they face day to day.
It costs a lot to setup, brokers have a lot of pressure to get business in and this often pushes the sales teams to do the hard sell and consequently the broker to the point where questionable tactics become an more of an option.
Where does the traditional trader / broker process and relationship fail both parties?
As mentioned, the high cost of acquiring customers is where the system fails both broker and trader. Brokers are pressured and in turn traders are being pushed with a hard sell and often misleading perceptions of riches to be made trading via advertising campaigns.
The high cost of acquisition is due to the competition out there. The cycle is never ending whereby brokers keep pushing for more customers through mass marketing, aggressive sales and then simply repeat as the life cycle of new traders is short. This leaves a trail of unhappy traders who feel done in and the industry’s reputation takes another hit.
How does your new trading platform OSYSFX solve this problem for both parties?
We’ve built a system that removes the human element from the whole process. From the customer’s first interaction with a broker through to conversion, everything is automated.
Whilst this concept may seem against the norm or what could be considered safe / traditional, automating relying on data collected; we can optimize each customer’s experience from the first click based on interactions and smart funnels that lead the customer through each step.
The whole process’ goal is to remove the sales call center from brokers. Removing the high pressure sales, understanding what marketing works for your brand down to a micro level and the consequent savings that come with this; will in turn lead to a better environment for traders and brokers longer term.
Brokers all seem fixated on a certain way of doing business. From the layout and design of their websites, their on boarding funnels through every interaction with customers along the way. Are brokers afraid of using technology that goes against the traditional model?
Due to the high stakes, many brokers are concerned that trying something new can be risky to their current operations but continuing wth the current business model is obviously not going to work for the majority. The brokers that can sit back and take a hard look at the where the future lies, will quickly realize that the only way forward is automation and less costs.
Having a smart platform that uses deep learning and algorithms to understand the individual customer and in turn giving them a more natural conversion process suited to them, and brokers understanding what types of customers convert; will dramatically decrease the costs of acquisition, reduce the need for hard selling and long term out perform the traditional model.