For our latest industry interview, we spoke with Polis Kakoullis, Risk Analytics Manager at FX Dealing Solutions. He shared his thoughts on the challenges forex brokers are facing, the technology they should be investing in, and why low latency trading matters.
Tell us about FX Dealing Solutions. What is it you do?
At FX Dealing Solutions we implement a transparent, stable, and dynamic risk management solution which works around the clock to enable our clients to tap into the value of their order flow. Risk management is an essential part in maintaining the smooth operation of a brokerage and critical to its success. The framework within which we operate gives our clients unique trader insight when it comes to their traders, as well as unrivalled insight into their various types of risk in order to improve operational efficiency.
What do you think are the main challenges forex brokers are facing at the moment?
I believe there are several challenges.
1) Cost per client acquisition is becoming more expensive
2) Regulations are becoming more strict and costly
3) More limited banking options
4) Difficulty finding experienced employees
5) Difficulty understanding the risks involved in brokerages
6) Difficulty calculating accurate numbers
What technology do you think brokers need to invest in to help overcome these challenges?
In terms of technology I believe it’s very important to invest in reporting. It’s also important to invest in cyber security as we see brokers being hacked on a daily basis.
Why is offering low latency trading a priority for brokers right now?
I believe it’s because clients are requesting it. Most brokers are adding more data centers and cross connecting the platform and components to reduce latency.
Why is having low latency trading also important for traders right now?
In my experience most clients are requesting low latency trading because they have identified loopholes in the platform infrastructure, and they want to capitalize on these loopholes in order to obtain risk-free profit.
How can your solutions help brokers better meet client needs?
We are the one stop shop for everything related to the dealing department (back end broker profitability point). We can provide smaller services such as MT4/MT5 setups, server setups, and dealing monitoring. We can also provide bigger services such analyzing the flow and optimizing profitability.
How do you see the retail forex industry evolving in the next few years?
I think we will see consolidation in the industry, as brokers will need more funds to ensure smooth operations. I think we will see stricter regulation, even offshore. And I also think we will see margins become tighter, as traders will be more educated and require more favourable trading conditions.
What solutions do you offer that can help brokers prepare for these changes?
Our clients can sleep at night knowing that their platform is running smoothly and that their exposures are always being monitored and covered as required. We provide a fully-managed, cost-efficient solution for managing the back end, leaving our clients free to focus on other areas of the business.
About MT Proxy
MT Proxy provides custom-built proxy server networks. These networks enable brokers to boost connectivity, reduce excess latency, and offer a better, faster online trading experience to clients worldwide. They also enable brokers to better protect their businesses against DDoS attacks and latency arbitrage.