The United Kingdom. An island nation whose capital city is world renowned for being the largest financial center in the world.
Whilst the largest banks, including all of the world’s foremost FX dealers nestle within the single square mile of the City of London, providing institutional liquidity and interbank trading facilities to a global audience, the domestic retail FX industry is something of a specialist niche market, as British firms operate their own trading platforms, often developed internally by brokerages which offer them, and due to cultural and regulatory factors, focus on spread betting and contracts for difference (CFDs) far more than they do on spot FX.
One specific firm which has made tremendous progress in its home market is ETX Capital, which recently purchased Irish spread betting company Shelbourne Markets. Last year, the company branched out into Europe’s spot FX-orientated market by adding MetaTrader 4 to its product range, and opening three offices in Europe.
In order to further detail ETX Capital’s corporate ethos, the company’s Head of Trading, Joe Rundle, spoke to LeapRate on the company’s direction.
How did you arrive at your current senior position, and what is your career background?
I started out as an independent Proprietary trader, using my own money to trade. I subsequently worked as a Forex and Interest Rate trader for Fleet National/ Bank of America, after which I joined ETX Capital in 2004 , initially working on the high net worth desk before becoming Head of Trading.
When joining ETX Capital, what did you initially seek to achieve?
I was excited about the prospect of working for a small, dynamic company and believed that if we worked with dedication and determination we would be able to claim a much larger share of the Spread-betting and CFD markets. Ten years later I’m proud to say that we’ve grown significantly and continue to do so.
Being a British company, what are the major challenges and advantages which face spread betting and CFD providers, compared to that of overseas firms which offer spot FX?
How about an example of something which is simultaneously a challenge and an advantage? I’m talking about being regulated by the FCA. It can undoubtedly be seen as a challenge, with FCA-regulated businesses having to adhere to a level of oversight which is much more stringent than that of many overseas firms. However, this is also an advantage, as we can hopefully provide a safer and more dependable trading environment for our customers, something which is extremely important to us.
How valuable is in-house platform development? As spread betting and CFDs often require specialist platforms, can the cost of this technology be offset by the volume produced by a domestic client base, and can the technological development be licensed to other firms?
To my mind it’s highly important. In-house development allows us to build platforms which best suit the needs of our customers, as with our Trader and TraderPro offerings. We don’t license these platforms to other firms – why negate a prime USP?
This is a very interesting period for ETX Capital. After branching further into Europe by adding MetaTrader 4 as a platform and opening three offices overseas last year, how has the partnership with Gold-i worked out in terms of capitalisation of the platform vs trading volume?
I’m happy to say that MetaTrader has been working out extremely well for the firm; in the last 12 months our international business has grown by leaps and bounds, with over 50% of ETX Capital’s revenue now being generated from outside the UK. MetaTrader has played an important role in that growth and we’re very happy with our partnership with Gold-i.
Even more interesting is ETX Capital’s recent purchase of Ireland’s Shelbourne Markets. Once Shelbourne Markets’ 10,000 clients have been migrated, what is the plan going forward?
The purchase of Shelbourne is an indication of the significant potential we see in the Irish market. Up until now Ireland has been largely neglected by UK Spread-betting and CFD firms, a situation which we plan to rectify.
By purchasing a spread betting and CFD firm, how does ETX Capital intend to gain further market share in Britain, and what is your opinion on the recent wave of high value mergers and acquisitions across the industry?
Given that many spread-betting companies are privately owned, it’s hard to speak with certainty regarding M&A activity by any of our competitors. As far as enlarging our UK market share goes, we intend to stick with the plan which has seen us expand year after year – offering our clients competitive prices, significant trading education opportunities and a high standard of customer support.
How valuable are technological advancements such as specialist mobile applications as developed last year by ETX Capital?
In the last seven years, mobile computing – whether by phone or tablet – has enjoyed a meteoric rise. We wanted to make it easier for our clients to trade, while at the same time offering them the same high quality platforms previously only available via desktop. By developing trading platform apps for Iphone, Ipad and Android, we have enhanced trading opportunities for our clients, as well as having demonstrated our ability to adapt to ever-shifting situations. At ETX Capital, we don’t see change as a challenge, we see it as an opportunity.
The cost of bringing new clients on board is increasing. What is your perspective on the use of innovative methods of on boarding and retaining clients?
We’re always open to innovative methods and suggestions – our marketing department has trebled in size in the last six months and continues to expand as we consider new and exciting ways to grow the business further. At the same time however, we believe that the most effective form of client retention is good customer service, which is something we endeavour to provide at all times
In providing technology to other FX firms, and measuring the opportunity to do business with FX companies, liquidity providers and software vendors, how valuable are events and conferences in which a specific emphasis on networking with the right industry leaders is prioritised?
The importance of such conferences certainly should not be underestimated; networking is a highly useful tool and it’s always interesting to increase awareness of competitors. We send ETX Capital staff to international trade shows and we’re always interested to hear about events that may prove beneficial to the company.
LeapRate wishes ETX Capital a very successful period of growth ahead. What are your plans for the remainder of the year?
Many thanks! The first six months of 2014 have gone very well; we hope the remaining half of the year will be even better. We intend to consolidate our new business in Ireland, as well as continuing to expand operations into new exciting markets. For example, today we launched Hungarian, Russian and Portuguese versions of our website, following on from our Czech launch last month. We anticipate that ETX Capital will continue to grow from strength to strength in the months ahead.