LeapRate Exclusive… Tom Higgins, CEO and Founder of Gold-i, is the driving force behind his company. He has been working in the financial technology sector for over 25 years, having spent most of his career working in the City, London.
His career history includes: Management Consultant at PA Consulting Group, Chief Technology Officer at The IPE, Head of IT Business Strategy at NYSE Euronext, COO Europe & Asia at Reuters and Chief Technology Officer at online broker, ODL Securities. He holds an MBA from Cass Business School in London.
Tom now plans to use his market insight to continue to drive innovation, introducing additional products to further disrupt the market. He is also focusing on Gold-i’s growth strategy as the company expands into new and emerging markets such as in South East Asia and the Middle East.
LR: Hi, Tom. Thank you for being LeapRate’s guest today. Been a while since you last joined us for a conversation, 4 years to be exact. What has changed for Gold-i since then?
Tom: There have been some major developments at Gold-i over the last few years. Most significantly, Gold-i has transformed from being a bridge provider into a full service FinTech company, focusing on multi-asset liquidity management, risk management and business intelligence software. We have offices in the UK, China and Australia and have continued to expand our global footprint too.
LR: Last year you launched Matrix Net. Who needs this product more – major liquidity providers or brokers who are looking to provide their own liquidity?
Tom: Our Matrix suite of products falls into two distinct areas: Matrix and Matrix Net. Matrix is used by brokers as a sophisticated multi-asset liquidity management platform for their retail clients. It is a cutting-edge product, with multiple routing and aggregation methods.
Matrix Net, an extension of Matrix, is used by leading Liquidity Providers and Prime of Prime brokers to distribute multi-asset liquidity to our clients.
Brokers connecting to a Matrix Net Liquidity Provider benefit from discounted transaction fees within Gold-i’s secure and reliable NETwork. Liquidity Providers using Matrix Net benefit from cost-effective, enhanced multi-asset distribution capabilities.
In essence, Matrix is used by brokers to consume liquidity whereas Matrix Net is used to distribute liquidity. Our Matrix products, therefore, add value to both brokers and Liquidity Providers.
LR: Gold-i also has a product for latency. Can you tell us more about it?
Tom: Most brokers today trading with a hybrid model are highly exposed to latency hunters – and many don’t realise this or notice the impact on their profits.
Latency hunters take advantage of the fact that hybrid brokers’ prices aren’t always up-to-date and they find a quicker way to obtain pricing. For many brokers, the losses they are making are hidden amongst their profits and therefore they are not aware of losses caused by latency hunters or how much more money they could actually be making if they addressed this issue.
Gold-i’s business intelligence and risk management tool, Visual Edge, automates the process of finding latency hunters and gives brokers the power to deal with the issue – either by getting a faster trading feed, blocking the trader who is breaking the rules, or using an A Book only model in which latency is irrelevant.
Every hybrid broker who is not using a tool to address latency hunters will inevitably be suffering. They just don’t realise it as there are so many trades and so many clients to monitor. Latency traders are clever and can be difficult to spot as they tend to make small regular profits to stay hidden. Without appropriate software to identify them, they will continue to go under the radar and eat away at profits.
Our Visual Edge dashboards are pre-programmed to look for latency trading 24×7 – and the cost of our software can be recouped within a matter of days just by addressing this issue alone. One of our clients, FINSA estimates that Visual Edge’s ability to help them to spot toxic clients has prevented them from losses of over $50,000 dollars per month.
LR: Can you tell us the trends that will reshape the retail forex industry this year?
Tom: There’s a significant increase in demand for RegTech. Our RiskDB and Visual Edge products provide easily accessible data for regulatory compliance and help brokers to capture information for their Capital Requirements.
Visual Edge also enables brokers to have a real-time overview of their open positions across all asset classes. We are adding further features to this product next year to help brokers to address more regulatory requirements and we will be partnering with RegTech companies for some advanced features.
Multi-asset trading, including crypto trading, will also continue to be a major trend as brokers continue to look at ways of diversifying in order to be more profitable.
LR: There have been a lot of changes last year in the Retail FX broker space, driven by regulation (like ESMA’s leverage cap). From your unique perspective, what changes do you envision for the industry in the coming months?
Tom: ESMA has impacted European-centric brokers and, as a result, many of these brokers are looking to increase their client base in other parts of the world, such as the Asia-PAC region. In addition, some of the smaller brokers who have been impacted by ESMA are looking to move from regulated markets to unregulated markets. This isn’t a great idea as clients like the reassurance of trading with a regulated entity.
LR: How do you manage to grow your business now that the markets are struggling?
Tom: To address the market challenges, Gold-i has been looking at new products and features as well as new geographical areas. We opened an office in Sydney at the end of last year to increase our focus in Asia-PAC – we are hoping for good growth in that region.
LR: What should multi-asset brokers do to transform their trading operations? How can they be helped in order to achieve that?
Tom: The main priority for multi-asset brokers is to have ultimate control of their costs as this will enable them to generate higher revenues. Multi-asset brokers should have a low staff count and outsource as much as possible to experts. This includes areas such as technology and marketing, enabling the core team at the brokerage to focus on business development, client acquisition and retention.
LR: What is your advice for start-up brokers? Where should they go for jurisdiction, which region should they consider, etc.?
Tom: If they are looking to start a retail FX business, they should focus on where their clients will be. They need to consider the market carefully and begin operating in a geographical area in which they know there will be some business. They will then need to plan their expansion. They won’t be able to be successful if they only stay in one part of the world.
Gold-i has a proven track record in helping start-up brokers worldwide with all their technology requirements. We have recently launched a range of Start-Up Bundles to help brokers have a simple, fast and cost-effective set up, directly onto their MT4 or MT5 server. We can help brokers with all their software requirements, hosting (through our partner, Beeks) and 24×7 technology support.
It is so important for brokers to get solid foundations in place from the outset – brokers grow when they use the right products.