Shanghai Money Fair Day 1: We are there, with a Chinese take on B2B FX brokerage technology
The Shanghai Money Fair, with its gigantic 500,000 deluge of attendees from across China and the international FX and electronic trading industry, is rapidly increasing its B2B focus, largely because in China, relationships with the right liquidity partners, technology vendors and integrators of solutions that bring West to East is vital. The West needs China and vice versa. Here is our report as day one of the Money Fair draws to a close
There are events, and conferences, and there are trade fairs.
There is London, Sydney, Hong Kong, Chicago and New York.
Each has its absolute place among the very upper echelons of the world’s most sophisticated and advanced electronic trading and FinTech centers, however, when it comes to sheer size, there is only one gargantuan giant. The Shanghai Money Fair.
The array of attendees at the Money Fair can only really be described as absolutely vast in numbers to the point where it is entirely possible to be stumped for a superlative to describe the deluge of attendees from across not only mainland China, but the entire world’s financial markets, electronic trading and financial technology sectors.
For many institutional FX and liquidity companies, as well as for many technology vendors and service providers, the perception of the Shanghai Money Fair has echoed that of FinanceFeeds in the past, in that it has been widely regarded as an intrinsically retail FX market event, hence the majority of attendees are traders or end users, as well as introducing brokers looking to onboard direct retail clients rather than strike important B2B relationships with providers.
Thus, the emphasis has been perceived by many as being on signing up retail traders as customers, rather than generating strategic partnerships between the several critical components of the FX industry.
This, however, is now beginning to change dramatically.
China is now a veritable powerhouse among FX industry giants. Trading volumes and deposit amounts in the People’s Republic bear absolutely no relevance or resemblance to those in other non-closed markets, and retail clients have come a very long way in a very short space of time and are now demanding a full end to end trading solution from domestic providers.
Thus, the Money Fair has evolved.
FinanceFeeds China witnessed the first arrival of the Money Fair’s almost half-million attendees at day one of the event, which is held at the Shanghai Exhibition Center in Middle Yanan Road.
The evolution of the Chinese traders away from now-defunct Chinese regional exchanges that were wound up by the government in several provinces for actually operating a b-book whilst posing as an exchange with a centralized executing venue toward international OTC FX has driven a vast demand for connectivity and integration solutions for Chinese brokerages and IBs into global liquidity and market access.
China’s unique ‘closed market’ in which the government does not allow free trade has generated a specific methodology by which Chinese entities work closely with Western firms via official channels, with Chinese companies that have Western presence, and Western companies that have fully operational Chinese divisions which are hosted and operated within Mainland China have transferred China’s modus operandi into a completely B2B environment.
Retail traders do not deal directly with overseas retail providers, instead the relationship between retail provider and Chinese business being via a B2B partnership with large introducing brokers, and Chinese technology providers that can bring their entire solution to a Western firm in order to assist them in angling their entire liquidity and brokerage facility toward China.
One such firm is LEANWORK, China’s largest SaaS firm for FX brokerages, with whom FinanceFeeds discussed this dynamic in great detail today.
LEANWORK’s presence at the Money Fair represents an exact case in point, that being the demand for integration of global brokerage services into a Chinese technology solution that provides brokerages in China with an end to end system that matches the Chinese method of doing business.
Certainly this year, the vast majority of IBs and brokers in attendance are looking toward their options for service providers that can bring them into vital partnerships across the world and technology vendors that can create their topography to bring China to the West in terms of retail order flow, and vice versa in terms of multi-asset liquidity and choice of brokerage.
Darren Qian, LEANWORK’s CEO considers the ability to bring Chinese technological infrastructure to a Western firm in order to assist in accruing a Chinese client base for top quality firms globally, to be vital.
Speaking to FinanceFeeds today at the event about what corporate and retail clients are looking for these days in China, Mr Qian said “Money Fair Shanghai is the largest finance and investment Expo in China. It is an Annual Event to go for both B2C FX Brokers and B2B Brokerage Tech companies. LEAN WORK successfully exhibited in Money Fair in 2016 and has a very good start this year too.”
“It is a great opportunity for us not only to meet the existing clients who are also exhibiting in the event but also to answer the inquiries face to face to a lot of prospective clients. At Money Fair, we met other financial institutions who are planning to enter the FX industry, new brokers who are looking for the right solutions to set up the FX Platforms and also many international brokers who need China own SaaS tools to empower the local team and their Chinese IBs and Affiliates” – Darren Qian, CEO & Founder, LEANWORK
Mr Qian also explained “It is also the time to network in different gatherings taking place in Shanghai this week, with friends who came not only from all over the China but also different continents. what did you get asked for by potential customers, and what do they want from their provider in general in China LEAN WORK winning sales and support team has done an amazing job to meet a huge number of interesting audience and answered their inquiries. Except for the system functionalities and software performance that the potential clients can experience in the live demonstration, the prospective customers also asked a lot about the on-boarding process, the system training and the on-going support.”
Last week, several large FX firms with no official presence in China had their websites blocked in China, as reported exclusively by FinanceFeeds following our investigation in the mainland, hence the importance of getting the topography right from a conformity perspective as well as operating in a method familiar to Chinese brokers, IBs and traders.
Mr Qian explained “Frankly speaking, LEANWORK is dedicated toward building a leading CRM brand in forex industry, not only in China, but also in the global market.”
“In China, more than 150 FX brokers use our products, Broker Work and Trader Work, on a daily basis. Among our distinguished clients list, there are not only local brands but also many western brokers who have established local presence in Asian Markets” said Mr Qian.
“With a solid client base and strong product offering, LEANWORK indeed is planning to penetrate the European market. Considering there exists many CRM providers in the market, we intended to provide distinguished service for foreign clients. At the initial stage, we are able to mainly provide two aspects of differentiated services for western brokers” he said.
Generally speaking, there are two models: sales force driven business growth or marketing/technology driven business growth strategy. If the broker chooses a sales force driven business growth strategy, a highly skilled and capable sales team and strong sales management and an effective CRM management tools are necessary to bring more clients.
If the broker chooses the latter, the broker shall to pay more attention to technology development and implementation so as to drive the company’s growth.
According to Mr Qian, retail FX Brokers prefer to take the corresponding sales management mode based on their own resources and therefore it’s advisable to focus time and money on superior resources.
For example, Mr Qian maintains that if the broker has strongest sales force and sales network, sales-denominated model will work with well this broker. While if the company’s advantage lies in R&D team, which is capable of creating fantastic product experience and strong at digital marketing, the broker may choose marketing driven model, enables marketing team to carry on more responsibilities and let majority of work be tackled by technology and let growth hackers to play a more important role.
“The LEANWORK CRM has already integrated a wide selection of applications to meet and exceed the expectations of brokers and we are one of the first CRMs to integrate with MT5, and has also bee integrated with almost 30 PSPs globally, hence the importance for us of being here at the Money Fair, as this is where many Chinese professionals come to find solutions to work globally, by using Chinese companies that are able to give them global access” Darren Qian, CEO & Founder, LEANWORK
Trading in China remains very much automated, and often carried out by portfolio managers, mainly operating from within the offices of IBs.
Thus, Chinese traders invest their money via an IB, and then expect the IB to trade it to profit. Mr Qian considers the ‘office based’ nature of Chinese FX business to be critical to the structure of operations for FX firms wishing to operate correctly. “Very few clients raised such requirements as having mobile trading solutions on an individual basis. All Lean Work clients can log in iPad and perform relevant operations, however, most clients find themselves more efficient and effective to use a CRM system on the PC or Laptops than on the Mobile.
From an FX industry perspective in China, this is because CRM users access to a lot of data and reports and they prefer an overall review on bigger screens, a good CRM system integrates with many other solutions such as VoiP, LiveChat, PSP, etc. and it will be easier for user to multi-task on PC than on Mobile and some CRM users make a lot of data entry and prefer big Keyboard than the small one on the mobile; and many CRM users access CRM account during working hours, when and where PCs and Laptops are still dominant.
“Even though above, we are likely to consider developing mobile CRM products for our clients such as mobile friendly reporting system and Mobile Notification for CRM users so as for a timely handling of tasks while out of office desks” he said.
Integration with WeChat remains a very important discussion point among Chinese traders and B2B providers alike, and its vast presence among the Money Fair attendees was over-arching indeed.
In January, FinanceFeeds CEO Andrew Saks-McLeod addressed an audience of over 300 senior Chinese FX industry executives in Shanghai, in a panel discussion which explained how to use Chinese media to maintain vital relationships with clients. Alongside FinanceFeeds during that discussion were senior executives from WeChat, who emphasized the importance of pushing all vital information to client networks via WeChat.
Mr Qian reinforced that line of thinking. “LEANWORK’s R&D Team has invested substantial effort in developing the WeChat Terminal and soon will launch the WeChat Terminal to both local Chinese brokers and International brokers with a WeChat Appetizer, to access and convert those 938 million users who on average spent hours daily in this application” he said.
China is an online world, and a mobile-first world. It is also completely B2B, hence the Money Fair’s increasing appeal to allcomers from the global electronic trading sector.
Here are some scenes from the vast, ultra-modern Shanghai Money Fair.