How to Start a Forex Brokerage with a White Label Solution?

The world’s largest financial market, Forex trading amounts to upwards of $7 trillion per day. It’s an exciting venture to get into. You might already be trading avidly or are currently an introducing broker (IB) and now want to take things one step further by launching your very own forex brokerage. And you’re wondering, where do I start? In most cases, there are 2 options:

• Building a Forex brokerage from scratch
• Selecting a white label solution

What is a White Label Forex Solution?

In Forex, a white label solution is typically a SaaS (Software as a Service) model offered by a tech provider that allows companies to start and operate their own Forex brokerage under their brand name, while utilizing the technology and infrastructure of the provider. This usually includes access to a trading platform and a customer relationship management (CRM) software designed for brokers to manage their traders. Essentially, the white label solution provider supplies the software and plugins necessary to start a broker, while the founders of the broker focus on the operations, marketing and client acquisition. This enables brokers to rapid speed to market without having to invest in the development of their own technology or infrastructure.

Why Start a Forex Brokerage with a White Label?

There are pros and cons to each option. Building a brokerage from scratch will allow you to have full technological control and the ability to customize every nitty gritty aspect, but it will require time and substantial amounts of manpower and capital investment upfront. You will need a deep understanding on not just the forex market, but on the technical aspects of trading infrastructure as well, in order to hire the right people and put together the appropriate teams to set everything up.

The challenges above are the main reasons why most aspiring brokers choose the path of least resistance by selecting a white label solutions provider to partner with.

How to Start a Forex Brokerage with a White Label Solution

The much less capital intensive and daunting option, white label solutions are often the preferred fuss-free method to start a broker. In this article, we will cover the steps to setting up and how to choose the right white label solutions provider for your business needs.

Choose a Solutions Provider

When choosing a solutions provider, the key consideration points are reputation and technical expertise. It is imperative to partner with a veteran provider in the industry with years of battle tested products that have consistently proven to work, as they will be in tune with clients’ needs, and continuously innovating their technological platforms. The following are a few key aspects to consider:

Trading Platform and Server Hosting
Recognised as the industry standard by the global trading markets, the MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are the trading platforms of choice for many brokers. You can either apply for a main label licence from Metaquotes directly or obtain a white label license with a solutions provider who usually holds a MT5 main label. cTrader is also another popular platform to consider.

It is worth noting that other than being more affordable in terms of monthly fees, under a white label arrangement, the solutions provider takes care of your server maintenance, eliminating the need for you to hire an IT team with the required expertise for round the clock upkeeping. If you opt for a main label, the software will be deployed on your server and you would be responsible for maintaining and optimizing, which incurs hosting costs and manpower.
In order to apply for any trading platform license, you will first be required to establish a legal entity and obtain an FX license. It is recommended that the White Label provider you engage also have resources to provide licensing and incorporation services. When it comes to licensing, it is important to note the types of products regulated as well as the cost and time required. Different regulators have varying licensing fees, along with the difficulty and time needed to obtain them. With experience, the solutions provider will recommend based on your business needs. Some reputed licenses include Cyprus Securities and Exchange Commission (CySEC), Vanuatu Financial Services Commission (VFSC), and UK’s Financial Conduct Authority (FCA).

Client Relationship Management (CRM) Software
The next key software for any Broker is a CRM to manage client accounts. Other than the similar benefits of time and cost savings, getting a White Label CRM from the same solutions provider will ensure that the CRM is conformance tested and optimized with the trading platform that you chose. A powerful CRM is indispensable for forex brokers when it comes to enhanced customer management and end-user experiences. The ideal forex brokerage CRM should be modular, scalable and dynamic. A good white label CRM comes with hundreds of customizable parameters so that you can tailor it to the unique requirements of your brokerage.

Client Portal (Front-End)
As traders become more sophisticated, the expectations of an ideal front end has become one that is rich with advanced features displayed in an easy-to-navigate interface focused on user experience. It has also become increasingly important that the White Label CRM is also available as an APP to capture the growing number of mobile users. Other notable features of a client portal are multi-account management so that traders can access all trading accounts at a go, pre-integrated payment solutions provider so you can begin accepting deposits immediately, dynamic KYC options that can be customized to fulfil your jurisdiction or regulator’s needs and of course 3rd party integrations such as live chat and VOIP for more effective client interactions.
Lastly, the White Label CRM should include an in-built affiliate marketing or introducing broker system which is one of the fastest and best ways to expand your business. You can learn more about some key features a good brokerage CRM should have here.

With so many considerations, it is not only costly but complex to design an effective CRM and to house a dedicated team to constantly improve and update it. White label CRMs can be fully customizable to create a lasting personalized branding, yet contain powerful technical functionalities developed by the solutions provider for you to have a quick and cost-effective start.

Liquidity

Besides white labelling technology, liquidity is another key element in completing your brokerage setup. Liquidity providers for forex brokers play a crucial role in financial markets and exchanges to ensure a seamless execution of trades. The liquidity provider you choose greatly affects the product offerings and trading environment that you can provide your clients.

It’s recommended to find a white label solutions provider that has a full-suite offering, so that there is deep integration across trading terminal, CRM and liquidity, all pre-optimized for peak compatibility and performance. You will want to choose a liquidity provider that has aggregated pricing so that you can obtain not just the tightest spreads but also depth to take in large orders. Established solutions providers offer Prime of Prime (PoP) liquidity that gives you access to institutional interbank liquidity. Prime of Prime liquidity providers often use aggregation technology via multiple liquidity streams to enable competitive pricing and offer “plug and play” integration.

Learn more about liquidity providers here.

Dedicated Support

Broctagon Fintech Group:
Your Turnkey Setup for a Successful Brokerage

It is often recommended to engage a turnkey solutions provider, from incorporation to trading technology and liquidity. This ensures that all aspects of the brokerage are handled by an experienced provider, which can streamline operations and improve the overall quality and consistency of the service, as all components are integrated and designed to work together seamlessly. Time savings without having to deal with multiple providers and leveraging on the experience of providers can also reduce the risk of costly mistakes.

Built upon years of fruitful experience in providing innovative premier brokerage solutions, Broctagon prides itself on our unwavering dedication in delivering multi-asset liquidity and superior trading technology to retail brokerage firms globally. Bringing together some of the brightest minds in the industry, we strive to streamline and elevate brokerages by equipping brokers with the means necessary to attract clients, exceed performance expectations and redefine industry standards.