Want to access one of the fastest growing market of astute traders? Here is how!
A nation of high quality derivatives traders, a client pool of over 2.2 million individuals and the technology ready and waiting to power your brokerage. We speak to one of the most instrumental leaders in the region on how your brokerage can attract the fastest growing market in Asia.
The electronic trading industry is rapidly evolving, and there has been an influx over recent years of new applications and platform technologies from outside the retail FX and derivatives sector which has engaged the younger, technologically astute traders.
In terms of development from within the industry, there has been only a small move toward the complete implementation of a solution that will solve the engagement and service aspect of traders and brokers in order to create a sustainable set of user orientated instruments and analytical tools for the next generation of traders.
In Turkey, a market of great interest to many firms, there has been a sudden increase in the amount of institutional and highly experienced traders who are now able to access global markets via retail platforms that offer instruments across OTC and exchange traded derivatives markets globally, however there are challenges.
Today, Firat Gurler, Founder at 6Zeka Technology spoke to FinanceFeeds in detail about this matter.
Mr Gurler explained to FinanceFeeds that prior to establishing 6Zeka, he held a senior position at institutional trading and financial services technology company DevExperts, where he operated the company’s Turkish effort.
Looking at the development of the Turkish market over the past few years, the infrastructural and organizational changes have been immense. “Borsa Instanbul began to look toward having a matching engine from NASDAQ, and as I remember, the deal was done in 2013 ready to launch was in 2015, so brokers began to colocate their services in Borsa Istanbul. Previously the matching engine was from Australian company as a result of a relationship that had been forged in 1986 and we were only able to send 25 orders per second by year 2000.”
“I joined the industry in 2000, and at that time I was working with brokerage houses which is now my background. I was a customer technology and marketing manager in global securities by 2004, and was responsible for electronic trading venues. At that time, clients usually had to wait for 7 to 10 seconds after pressing the button before orders were executed” said Mr Gurler.
“After 2005 we had a better developed futures market here in Turkey. We were then able to produce an API to send futures orders electronically during my tenure at Raymond James which was a major step forward. After year 2000 after the flash crash, I decided to go into algo trading.
“Back then, the drive forward was all about electronic trading in the brokerage houses. I waited for Borsa Istanbul to implement NASDAQ technology which now allows us to execute 10,000 orders per second and that is when things really took fof. The nice thing about NASDAQ is that it has ready technology for foreign companies to connect to, so now instead of having four to five data vendors, there are several hundred. 6zeka is now at the top of the vendor list due to the numerical beginning of the name” said Mr Gurler.
“Nowadays, instad of local vendors, there are various service providers in the data provision business, plus brokers themselves are going into the data vending business, and are using companies such as CQG or DevExperts. What they are interested in is to have an effective front end” he said.
“For this reason, we connected with TraderEvolution Global. We decided to go with our new brand as a white label brand of the TraderEvolution Global platform. This has allowed us to connect international and local data feeds into one platform, and can bring many brokerage houses into one platform” explained Mr Gurler.
“Now, any brokerage house can get into our platform and reach the markets they need to reach. When I look back to the year 2000, when I started in this industry, the number of open accounts in Turkey was about 250,000. This remained very stable for around 15 years and did not grow. If you check the demographics, they increased in age by the same amount, meaning nobody came in or out of that market” – Firat Gurler, Founder, 6Zeka Technology.
“Turkey is number 19 in the world’s economic ranking in terms of GDP, but in terms of exchanges, it is number 32 so there is a gap. There is a population of 80 million, and there is not enough interest in local markets” he said.
“One of the reasons behind this is the technology. The technology in this country which connects to financial institutions is very old, and people from different cities do not want to access the market as they feel they are at a disadvantage compared to those in Istanbul and they are right, because the infrastructure does not cater for those in other regions” explained Mr Gurler.
“Once there was some evidence that the national infrastructure would become less fragmented, the number of traders began to increase from 2015. It began, due to better infrastructure, to increase to 2.2 million traders by the beginning of 2021″ he said.
“The retail traders have finally showed interest. The high rollers in the old days on which the industry was set up no longer represent the core of the business, but there is now another problem, in that for the 2.2 million traders, there are only 5,500 employees which strive to support the 2.2 million clients” Firat Gurler, Founder, 6Zeka Technology.
“When looking business scalability in detail, some brokerages have over 200,000 clients and just 20 employees so technology is the only way that these clients can be served. We set up this particular business in the middle of the COVID 19 situation, and have seen a lot of traction despite the lack of ability to meet clients and vendors and vice versa” said Mr Gurler.
“In terms of operations, we have an R&D office in Antalya, and are establishing a system on top of TraderEvolution Global’s system toward machine learning. TraderEvolution Global receives the data, and sends the orders, and then we have our own machine learning system which collects the data and then we send out smart advisory and order execution services to end users so that the small number of represnetatives can serve a trading population of 2.2 million which in the near future will rise to over 5 million” – Firat Gurler, Founder, 6Zeka Technology.
“Our machine learning project has also been supported by the Turkish government, and we are looking to reach the mass market. We met with Kanal Finans in Turkey. That channel used to have 30,000 followers on YouTube, and currently it provides analysis via YouTube and has now got a following of 300,000. We participate in this with videos, and talk about important matters such as the demand and supply of volume and pricing” explained Mr Gurler.
“The Turkish market is very much ready for new technology and tools, especially within the Millennial demographic. That particular age group is looking for new ways of analyzing the market and they do not want to talk to their brokers, they trust more in outside sources. We are campaigning with the brokerage houses that we have onboarded, and continue to sign brokerage houses to our platform for global markets and we will be able to provide different analysis to the brokerages as we are developing our own tools for market analytics” he said.
“We need to evolve into new services, such as advisory. I am investing my personal capital into this and expecting to bring on new companies with market capitalization around the $360 million as in one particular firm we are onboarding now. It was not like this ten years ago, but many have increased due to their obtaining brokerage house licenses that allow them to become investment banks and hedge funds. This particular company which wasn’t even a $10 million valuation ten years ago is now up to almost $1 billion” concluded Mr Gurler.