Today, competition in the retail forex brokerage market is intensifying. Retail forex brokers are no longer content with offering their clients just forex trading services; instead, they aim to attract more clients to deposit funds and trade, as well as extend the client lifecycle, through multi-asset trading services.Some brokers offer contracts for difference (CFDs) across various asset classes, joining the ranks of multi-asset financial trading service providers to meet clients’ diversified investment needs.
Although many retail forex brokers have successively launched stock trading and cryptocurrency trading services, offering multi-asset trading to clients is, after all, a foray into new territory. Brokers typically face higher costs and must also consider issues such as platform integration and role transitions.
So, what steps can forex brokers generally follow to build a trading platform capable of providing global multi-asset liquidity?
Connecting to Liquidity
To build a multi-asset liquidity trading platform, forex brokers must first connect their platform to the relevant asset trading markets or exchanges.As intermediaries, brokers may need to rely on bridge service providers to route client orders to the trading markets for execution, and they may need to pay a certain fee to these providers. Costs can be reduced by signing long-term partnership agreements with specific bridge service providers.
Integrating Market Data
Multi-asset liquidity platforms are dedicated to integrating global asset classes—including securities, futures, foreign exchange, and digital currencies—to provide solutions for investors seeking global asset allocation. They combine different categories of investment products on the platform based on client needs. To offer these trading services, the trading platform must provide clients with the corresponding data.One approach is for brokerage firms to obtain authorization from exchanges to access data and upload the publicly available exchange data to the platform for investors’ reference. Additionally, brokers can access real-time exchange or trading market information by integrating FIX and API interfaces into their trading platform servers.FIX stands for Financial Information Exchange, while API refers to an Application Programming Interface. By integrating FIX and API into the platform, brokers can facilitate the real-time exchange of various types of financial information on a single platform, directly obtaining data such as liquidity levels, order volume, and transaction prices from exchanges, and can help record post-trade market transaction data.
Integration with Settlement Channels
When traders engage in investment transactions involving different types of assets, the platform must facilitate the payment of transaction amounts and the settlement of corresponding returns. Therefore, the trading platform must not only integrate with third-party payment channels but also connect to multi-asset trading markets within the clearing system to settle the claims and liabilities between trading counterparties.
Establishing a Trading Team
Launching multi-asset trading operations means offering new asset classes, which requires brokers to establish new internal teams or provide specialized training to existing staff. These employees must possess professional knowledge and trading experience in the relevant fields to help brokerage firms analyze market trends, understand business cycles, and resolve various issues traders encounter during transactions.
