With many banks and brokerage firms looking to white label services for their online trading needs, here are some of the advantages they offer
Outsourcing a trading platform to specialists that provide a white label solution is proving to be an increasingly popular method of entering the world of online trading for large and small financial institutions. Both banks and brokers are eager to tap into the ever-rising number of online retail traders of FX markets, and many of the leading online players have developed their own platforms that can be integrated and branded into more traditional institutional services.
The advantages of a white label service are more obvious in these times of economic constraint, as banks and brokerage firms try to cut back on their expenses and streamline their operations, while trying to keep up with an ever-changing market. A plethora of service providers offer these institutions the ability to outsource the back office, marketing and IT needs of running an online trading service in a relatively low-cost and easy to set up way.
There are a number of key factors that should be looked at when selecting the right partner for a white label offering. Obviously the provider needs to be able to offer a range of trading solutions that are available on many of the leading platforms, but they also need to be forward thinking and capable to quickly adjust to the changing market environment.
Most of the providers will offer to host and run the platform, while allowing clients to monitor and analyse the trading activity of customers. They also usually offer a highly customisable service that can be tailored towards individual clients requirements.
Most of the providers will offer a range of tradable products, but it is the breadth of services that tend to set some apart from others. Saxo, for example, offer multiple asset classes, from forwards, spot, vanilla and binary options for FX, as well as CFDs, stocks, future, ETFs and contract options. Saxo have signed up a number of leading institutions to their service, including Barclays Stockbrokers and Citibank, who use the Saxo developed CitiFX Pro platform.
Another crucial factor in choosing a white label provider is the security and stability of the service. Leading banks and brokers have built up their client databases over a number of years through trust and security, so some might be concerned about outsourcing their services to a third party and handing over all this information.
However, most established white label providers offer reassurances about the security of their services, with heavy-duty firewalls and monitoring of the software designed to ensure a safe environment from which to trade.