If you are an affiliate and currently working with an FX or Binary Options broker, have you ever been frustrated at low conversion rates on your traffic? Have you ever asked yourself whether or not you could run the operation on the other side of the affiliate program you are signed up to? Opening a forex brokerage is not as big a stretch as you may think, although few are aware of what comes with it.
According to the Bank of International Settlements, trading in foreign exchange markets in April of 2013 averaged $5.3 trillion in daily turnover, up from $4 trillion in April of 2010. With estimates of nearly $8 trillion by 2019, there are no signs of slowing down. And still, recent years have left the forex industry with more challenges than solutions, more questions than answers and a lot of money and time wasted in advertising and selling the non-salable. Not only is the competition constantly growing, the regulators are placing more and more obstacles in the path of brokerages, thus making client acquisition harder, but the client base has also transformed into network and individual trading abusers resulting in low income generation.
How can a forex brokerage survive today’s climate of ever-increasing costs over income? How can business development be guaranteed in this unstable environment and how can wasted time/money be avoided in order to allow the establishment of a solid foundation and infrastructure to support future growth?
Forex Brokerages start out with set plans and proactive methodologies, but over time, they allow themselves to become reactive, a systemic approach towards operations that will eventually kill the running system and require refreshing and starting over, if not a complete shutdown. So it is imperative to build strong foundations that will work as a base for tomorrow’s activities.
Do you have the data to kick-start your forex brokerage?
It is a fact that the more data you have, the better your chances to acquire sufficient market share, expand your operations and grow. With targets hovering above every decision you make and every day costing more than the previous one, income generation is imperative, if not vital, to your rise or fall. Given the importance of data, this is an area where affiliates and participants in the gaming industry would have a clean head start should they ever decide to branch out and utilize their resources to start a forex brokerage.
Spending money to acquire data does by no means guarantee income. It is however among the first of steps required to get you where you need to be. Questions such as “should I spend?”, or “How much and when should I start spending?”, will puzzle you in the beginning, while over time, you will grapple with questions such as “is my spending enough?” and “should I spend more or stop spending completely?”. Marketing spend always played a big role in brand awareness although with today’s social media and free educational material, this has become a little easier for start-ups, because as prospects strive for quality in their decision making, they will need information.
Education will be imparted by your team which needs to either have acquired this from past experience or from you. Hiring experienced people can reduce training costs and the time it takes them to get up and running but they can bring with them bad habits and divergent ways of working that you may need to control. Are you capable of training newcomers and developing fresh ideas to push your business forward as fast as possible?
Putting the right team together is among the most important things you will do. The time when we could give our sales team one page with reading material, send them off to call prospects and generate income has passed. Not having enough knowledge to promote themselves and their organizations will result in a complete alienation of your lead database. The prospect will immediately see through the weak sales rep, the conversation will be over, and it’s then very hard for any future positive interaction to take place.
The above is but a short introduction to the back-end of running a forex brokerage. There are various solutions when it comes to deciding how to start, and these can be discussed with any broker directly, or a licensing agency that can set you on the right path. It is imperative that you pay close attention to the overall operations and correctly structure your strategies towards income generation, from the very early stages. While the level of competition and the challenges have increased in recent years, the overall market is only growing stronger, offering plenty of opportunities for a newly formed forex brokerage.