FNG Exclusive Interview… Following our exclusive report from earlier this week that e-trading technology provider MahiMarkets was releasing a new, predictive pricing solution for CFD brokers, we thought it would be a good time to catch up with MahiMarkets’ Chief Product Officer Andrew Morgan and find out more about what indeed is new and different.
Here is what he had to say…
FNG: Hi Andrew, and thanks for joining us today. Please let us know a little more about MahiMarkets’ new CFD pricing product.
Andrew: Thanks for having me! MahiMarkets’ CFD pricing product is a big development that I’m really excited to lead given the potential for transformation.
There’s been a huge growth in demand for CFD trading, but reliable pricing and risk management has so far been challenging for brokers. Our pricing is predictive, and removes temptation from the adverse trading styles of unwanted, harmful clients. Users will be able to produce tailored pricing models for different types of liquidity, as well as control spreads, market volatility response, and arbitrage protection, something that was previously all delegated to a single LP, putting brokers at enormous, entirely unnecessary risk.
Users can also look forward to auto-classification of flow, to partition their book whilst keeping operational costs low and reducing time to action in risk management decision-making. Finally, we offer simulations and backtesting to avoid mistakes that could be costly and detrimental to client retention and business reputation.
We’re really pleased with this offering and the wide range of benefits it brings to users.
FNG: How does MahiMarkets’ solution for CFD brokers differ from what brokers typically do today?
Andrew: Brokers have historically relied on one liquidity provider for pricing each instrument, which means there’s one single point of failure with no backup, and potential for poor pricing during illiquid hours. Our product has specialist pricing techniques, and our clients are able to create a significant, measurable increase in B-book PnL. Users can benefit from features including liquidity reduction and sophisticated skew drivers to maximise yield, whilst delivering very tight spreads to their customers with zero slippage. In addition, it’s entirely possible to create spreads that are tighter than those available from the LP, so it’s a no-brainer!
FNG: What are some of the major issues facing Retail FX and CFD brokers today? How does MahiMarkets go about addressing those issues?
Andrew: Pricing accuracy is more important than ever, and we’re frequently seeing e-trading businesses throwing out good customers simply due to poor pricing. Accurate, predictive pricing makes an enormous difference in managing client behaviour, enabling honest clients to avoid accidentally exploiting latency, whilst highlighting only those who are acting with adverse intent.
Risk management is another necessity in the toolbox right now. Having a robust risk management system in place is absolutely critical in the current financial climate, protecting businesses and their clients from unexpected events. It’s particularly important to ensure your risk management tools are a good fit for your business and that you know how to act on what your data is telling you too.
With regards to CFD brokers specifically, I think the challenges mentioned above are the most prevalent right now. Reducing risk by not relying on a single LP, offering the ability to create extremely tight spreads, increasing yield, protecting against negative client behaviour and attracting good client flow are all hugely important right now, and things we can directly help with.
Our response to all of these issues, along with countless other challenges in the industry, is to create software that tackles them head on. All of our products are entirely flexible and are designed to seamlessly fit within existing businesses of all sizes. They’re fully customisable, meaning we can optimise them based on each client’s goals and challenges. I think one of the biggest things to note is that all of our products centre around the importance of visibility; that is, having access to critical data in a timely manner and knowing how to act on that information. That’s why we do things a little bit differently – as well as our unique products, we also form a partnership with every one of our clients in order to ensure our products are performing exactly as they need them to. We’re always on hand to answer any questions they have, make adjustments, even create new features that will benefit them.
FNG: What geographic regions will you be focusing on with your new solution? Where do you see the most growth opportunity in the industry?
Andrew: We don’t see any global restriction on the product, we service clients around the clock, around the globe, so brokers in all locations can benefit from this technology. Brokers that have been hit the hardest from reduced commissions, tighter spreads and nefarious trading will certainly benefit quickly.
FNG: What else can we expect to hear from MahiMarkets in the coming months?
Andrew: We’ve got lots in the pipeline keeping us busy right now and we’ve made some big changes recently too. We recently added MFXPulse to our product suite, which allows users to access and query their data at the touch of a button. We’re constantly listening to our clients and updating our products with new and improved features, as well as making adjustments according to how the market is evolving. Keep an eye open in the next few weeks for another exciting product announcement too!
