The key to success for Asian forex brokers

By Tanner Serifler, Chief Development Officer

Several members of the Fair Trading Technology team just arrived back from our latest trip to Tokyo and the Forex Magnates Tokyo Summit.

Tokyo is the largest metropolitan area in the world and is referred to as one of the three “command centers” for the world economy, making it the perfect place for an international forex Expo. Japan is one of the largest economies in the world and the yen is one of the largest currencies in international trade and forex trading.

The Japanese forex market itself is operated by a handful of large brokers, which seems to acquire or crush all upcoming competitors. So how do you break ground in this ruthless market?

In conversations with brokers and fin-tech consultants, it was very clear that the key for a successful broker in Asia is to have a good affiliate and IB network. Trust takes long time to build up in Japan and other Asian countries, and people are mindful of sending money offshore, making a local presence and tight relations with their IB's are a necessity.

The value of building relationships on trust is what has made network marketing huge in Asia compared to Europe, where it is almost frowned upon. In the same way IB networks often run many levels deep with complex structures and commission plans.

Digging deeper, it became very clear that the existing tools for managing the IB networks was often third-party tools—or even Excel spreadsheets—with no or limited integration into their trading platforms. Although manual labor is still cheap in Asia, it creates a time latency and overhead for the broker and introduces a big risk for human error.

What you need is a technical solution tightly integrated to both your trading platforms and CRM, where you as a broker can follow and monitor how your IB network grows: how clients are acquired, how commissions are charged on all levels and which payments you need to send out.

But don't forget your IBs. They need their own tools in the same system for following the sales process, signing up sub-IBs and getting daily numbers generated to optimize their own marketing channels.

This is the idea behind Fair Trading Technology's one solution philosophy for the Turn-Key Broker package: Back Office, CRM, Affiliate System, Traders Room, Bridge and Trading Platforms, all tightly integrated as one solution. Building and managing your networks is just a standard, built-in part of the package.