Creating a successful retail trading solution should always end in simplicity.
Building the ideal trading solution for the retail crowd is no easy feat.
After flummoxing scores of product engineers, marketing moguls, and fintech developers for decades, most brokers, to this day, fail to create a seamless client journey that serves both the client and the broker.
The holy grail is for potential clients to go from new prospects to active clients without human assistance or intervention.
In the 1989 cult-classic film Field of Dreams, a baseball enthusiast intends to build a new baseball field but doubts its ultimate success. As he strolls through his cornfield one evening, a voice whispers to him: "If you build it, he will come." After some deliberation, the protagonist decides to risk his time and money despite success not being guaranteed.
Building a cohesive, self-sustaining onboarding system, including a trading platform, is similar to creating a baseball field. Despite being superficially simple, there are hundreds of considerations which ultimately make the project very complicated. However, if successful, the result will necessarily be helpful and attract fans.
To date, we have seen several valiant attempts to create such a seamless system, including Saxo Bank, IG and Markets.com. These brokers have invested millions into developing proprietary platforms while simultaneously catering to the Metatrader crowd. However, their attempts have proven to be suboptimal because of the difficulty of supporting multiple platforms with differing settings as part of one synchronous offering.
But what if we compare the retail trading world with the best of the rest?
Let's take Apple as an example. Apple's online presence and modus operandi are proactive and dynamic. Their approach holds the customer’s hand from start to finish and ensures visitors find whatever they’re attracted to. All in a smooth and frictionless way.
Developing and persisting with concepts such as "discoverable design" and "love at first launch" allows the US tech giant to strengthen brand loyalty and deliver memorable experiences for customers as standard.
In effect, Apple has cracked the code of how companies should introduce themselves and their services to their potential customers and how to handle them collectively without losing the personal touch that makes them come back for more.
The Retail Client Journey
Online financial trading is a complex process that requires a multifaceted approach to be successful. If onboarding is as complicated as the market itself, potential clients tend to fall by the wayside and exit the onboarding "pipeline", as many brokers refer to it internally.
In the online trading industry, the prospect's journey from interested party to live client can be broken down into three specific parts:
Onboarding
The onboarding process begins when the prospect visits the broker's website and submits contact details. For the prospective client, the trading world often seems confusing and too dynamic. However, the prospect is keen to trade various assets, enabling the broker to establish a new client. For the broker, the ideal outcome is for the prospect to be persuaded to open a trading account and verify all their necessary documents without human intervention.
To do this, one word comes to mind: simplicity.
The number of steps must be limited, and any steps provided must be simple and self-explanatory. Better yet, completing the onboarding process should feel like a completed milestone with a sense of achievement or reward.
It's important to remember that every client's journey is unique. The excitement that took them to the broker's website can be maintained with a smooth sign-up process, thereby ensuring the prospect becomes an avid trader once their account is activated.
In an ideal scenario, our aspiring trader must easily navigate from demo to live trading. The funding process should be a stage that fills the aspiring trader with a sense of excitement. Their ability to deposit/withdraw should be easily accessible and never strung out to give clients the perception that the broker is only interested in receiving deposits but hates issuing withdrawals. Even tiny minutiae such as this can often impact the broker's reputation.
Also noteworthy is the recent trend towards funding trading accounts with cryptocurrency. Brokers should understand that providing additional funding options improves deposits and helps support the narrative that the broker serves client needs.
Capital
In an ideal scenario, our aspiring trader must easily navigate from demo to live trading. The funding process should be a stage that fills the aspiring trader with a sense of excitement. Their ability to deposit/withdraw should be easily accessible and never strung out to give clients the perception that the broker is only interested in receiving deposits but hates issuing withdrawals. Even tiny minutiae such as this can often impact the broker's reputation.
Also noteworthy is the recent trend towards funding trading accounts with cryptocurrency. Brokers should understand that providing additional funding options improves deposits and helps support the narrative that the broker serves client needs.
The Trader's Cockpit
The trading platform (online, tablet or mobile) must be designed seamlessly, including intuitive navigation. Among software developers, it is often said that good software shouldn't need an instruction manual.
Traders must be able to find their desired trading instrument, ideally with an active dynamic keyword search that captures all instruments while sometimes providing tangential ideas about other tradeable instruments.
For example, if a trader types "gold" into a search field, they should see not only the spot gold market in relation to the US dollar. They should also see any and all companies with the word "gold", gold futures contracts, cryptos with the word gold etc.
Once the client has decided what they want to trade, the actual trading should also be seamless, including seeing their exposure to current trades, their leverage settings, the current profit and loss, etc.
Importantly, the client must never feel confused or isolated in their understanding of the trading platform. This notion is best mitigated directly through software tweaks and innovations as opposed to providing endless links to Frequently Asked Questions (FAQs) and directing clients to speak to client service reps.
Building Smarter, Not Larger
What is clear is that building a fully integrated onboarding process is elaborate, complicated and, therefore, difficult.
However, every big project becomes manageable when broken down into multiple smaller parts. Looking around the retail trading landscape, one broker leading the pack is Plus500.
The Israeli-based LSE-listed broker is a notable example of how to create a fully automated pipeline that allows prospects to become traders with minimal human intervention. The client journey is complex but appears simple. Plus500 claims to achieve mass auto conversions, and their market success in recent years suggests they've cracked the code of the onboarding process.
Let's look outside the retail trading industry and check for novel examples of excellent approaches to onboarding. We can find suitable examples in the cryptosphere, such as Binance and Bybit. Meanwhile, Betfair and Bet365 demonstrate how the process should work in the gambling space.
It is also worth noting that platforms like Robinhood and eToro are introducing gamification aspects into the sign-up and trading process – a new trend that seems to work for their respective businesses. Gamification makes the client journey more fun and engaging for excitable new traders – a win-win for both the broker and the client.
The Journey Clients Want
A prospective client should be able to answer the following questions without checking anything.
To reassure novice clients, the broker must appear as a safe haven that shelters people from financial storms. In the initial stages, many novice clients will feel their entire trading experience is like a storm, further entrenching the need for active traders to have real-time client support. This could be done via online chat, voice, or video calls. Regardless of how it’s done, these measures ensure the client is always well-informed and never feels confused about his topsy-turvy trading experience.
Simplifying Complexity
Other aspects are worth considering, including leverage, overnight swaps and automatic stop-outs (margin calls).
Most novice traders will have never heard of "leverage" until they place their first trade. Also, they will likely need clarification about daily overnight charges called FX swaps being levied on their FX trades. Losing trades that are automatically stopped out to prevent a trader's account from going into negative territory is also poorly understood.
Suppose a broker waits for these possibilities to eventuate before explaining them to the client. This tends to undermine the client-broker relationship and could be interpreted as a nefarious move when, in fact, the broker was simply inattentive and forgot about the little details that can mean so much.
One Size Doesn't Fit All
In online trading, Metatrader is the go-to standard. This platform has dominated the retail space for over a decade, meaning most brokers licence third-party software as part of their operations.
Other solutions, such as cTrader and Devexperts, are available but not without their particular foibles. Still, the same fundamental question stands: should brokers offer their clients multiple trading platforms (to cover all their clients' needs) or just one (to simplify their operations and make a seamless offering all the more achievable)?
The easy answer is that there's no easy answer.
For some brokers, offering multiple trading platforms and trying to knit them together as part of a cohesive offering will be suitable. For other brokers, it will be appropriate to forego all the additional benefits multiple software packages offer and stick with one platform.
For most brokers, one offering is entirely sufficient. They may not be able to capture all clients in all countries, but the ones they do attract will have a better trading experience. For others, such as Libertex and Deriv, a multi-platform offering is more suitable, although both have room for improvement in making the client journey smooth and intuitive.
One trading platform can never fit everyone's needs, while a multi-platform offering will always undermine a cohesive onboarding process that relies on consistency and simplicity. Therefore, with all things considered, brokers should strongly consider catering for “multi-environments” to avoid clients getting lost in an administrative maze.
Only when clients have obtained sufficient trading experience can they feel comfortable with any trading platform and understand the nuances between them. Until then (and considering that most clients are novices), the safest bet is to provide clients with simplicity instead of what the broker finds comfortable.
Ghostwritten by George Tchetvertakov in collaboration with Dr Demetrios Zamboglou
Published by Finance Magnates
