Trading stocks, options and Forex is far from easy—if it was, there would be no need for the financial services industry to exist at all—and very few people are born with an innate understanding of Bollinger Band analysis or the stochastic oscillator.
Those who fully understand the intricacies of stock market trading are more likely to remain actively involved with their money than those who take more of a set-it-and-forget-it approach to their investments, and are more likely to enjoy long-term profits as a result. They’ll be better able to understand the options that exist for their money in good times and bad, and will be better equipped to make adjustments to their portfolio as needed, and they will be able to leverage the full range of financial services strategies at their disposal when making decisions about their investments.
Trading schools are a time-tested way for everyday investors to get up to speed on the possibilities of stock market trading, and these days courses can be delivered online, in person, or via a combination of both. These programs help investors not only understand what goes into modern trading strategies, but also serve to introduce many people to topics including technical analysis, Forex, margin trading, futures strategy and more, widening their investing vocabulary while simultaneously exposing them to the newest and most effective subjects in personal financial management.
And technology is transforming the world of investor education. In addition to online courses and interactive learning apps, even paper trading—the use of hypothetical trades to practice buying and selling securities without actual money being involved—has gone digital.
Given all these new tools, it has never been a better or easier time to learn about trading.
Creating an Effective Program
Not all trading education programs are created equal, of course, and the range of options available to prospective students right now is wide and varied. As of 2016, there are literally dozens of stock market trading schools up and running in the U.S. alone, each focusing on their own niches, whether it’s trading in stocks, futures, bonds, Forex, and more, and each offering a mix of basic investor education, advanced market strategies, mentorship, community access, and other features.
New entrants to the category not only need to stand out from this pack, but they need to bring a high quality, effective teaching product to the table as well. The truth is, there is much more to effective trading than just knowing about the markets and the strategies that are used to extract profits from them. An effective trading program needs to include all facets of the experience. You can pick up any number of investing books or spend a few hours online and learn much of what you need to know to get started in trading. But understanding strategy and the markets is just a small part of becoming a successful trader.
That said, a basic, foundational understanding of the markets themselves, as well as the strategies that traders use to profit from them, is a critical component of any trading education program.
Students should learn how to break down and analyze a stock chart, what to look for when doing technical analysis, how leading indicators work together, and how to spot a potential buying or selling opportunity on a chart or graph.
So much of the work that professional traders do can seem foreign to novices at first, so students need a firm grasp of the field’s more opaque concepts and an understanding of all the most common terms in order to fully understand how today’s trading strategies work and why. They need to be able to see what’s happening in a given trade, and what forces are working to make that trade happen.
Once students have a firm grasp of the markets they’re trading in and the most effective profit strategies for those markets, hands-on mentorship is the next step for students. That way, students are able to get an up close view of what today’s traders are really doing on a day-to-day basis and how they are finding profits in the modern markets.
At this point in the learning process, students need to be able to take the skills they’ve learned in the classroom and apply them to real-world scenarios, with an experienced trader at their side to help guide them through the process.
Educators call this “experiential learning,” but it just boils down to learning through doing, allowing students to find their way through real-world scenarios that test their understanding of the concepts they’ve learned as well as their savvy with live market action.
And, for many traders, the education process never ends. The field is constantly changing and evolving, as new market opportunities emerge, old strategies fall by the wayside, and new technologies become available to traders.
The education process should mirror this experience. Trading schools need to remain as a resource for their students, even long after they’ve gone through the program and moved on, to help them navigate the complex world of professional trading and ensure that they’re up to date on the latest tools and strategies.
Attracting New Students
As mentioned, there is quite a bit of competition in the world of trading education, and schools currently exist to serve just about every niche imaginable. The natural differentiator in this kind of environment, of course, is quality: how good is the program you offer? How well does it serve the needs of your customers?
But, in this crowded marketplace, product quality is just one part of the equation for trading school administrators. These education programs are businesses like any other, so attracting new students—like a small business looking for new customers—is key to long-term survival. Consider the following ways to attract new students to your trading school:
Social Media: The growth of social media platforms like Twitter, LinkedIn and Facebook in recent years has been a boon to digital marketers, allowing campaigns to be targeted and measured as never before. Reach out to trading and investment communities on these networks and engage with their followers there. And remember, it’s called “social media” for a reason—be social, not simply focused on marketing in your interactions. Participate in the conversation, and the leads will come naturally.
Events: In today’s digital-first world, it’s easy to overlook the simple power of in-person events, but personal interaction is a great way to bring attention to your trading school and drum up interest among diverse groups of people. Even if your program is delivered entirely online, it’s always a good idea to reach out to local groups in your area and ask to pitch your services at their meetings or get-togethers. They may seem limited in scope, but in-person events allow you to reach potential customers who may not be as digitally-savvy as you are, opening up your marketing to an array of new targets.
Advertising: Sometimes the simplest ways are the most effective, and advertising is no exception when it comes to driving traffic to your trading school. Traditional outlets such as print publications can still be effective ways to attract new students—particularly when run alongside local events that you’re hosting in the area—but digital advertising is making it increasingly easy and cost-effective to bring your message to the people you want to reach. Search-powered advertising on Google, for example, can tie your ad to whatever terms you want—“trading school,” for example—so anytime someone searches for those terms they see your ad. Similar functionality is available on Facebook, LinkedIn and the other social networks, allowing you to very strictly target who sees your ad and under what circumstances, vastly increasing the chances that those people click on your ad and request more information.
SEO: Search engine optimization is another technique that no online trading school should overlook, as it is an effectively free way to improve your organic search performance, making your site more likely to appear in relevant search results. While at one time SEO was focused on page tagging, headers, formatting and other on-page concerns, in recent years it has come to reflect less your ability to follow the search engine companies’ various rules than others’ respect for the work you are doing on your site. With this is mind, it’s crucial to create quality, topic-appropriate content for your site and update it on a regular basis. As a trading school, you certainly have expertise in a wide range of trading and investing topics; blog about them, share relevant articles that you find on social media, create infographics, videos and other content that delights your users while driving home the message that you are the experts on trading education and your site is a valuable resource. Your SEO will benefit as a result.
For investors, knowledge is power. And when it comes to the complex world of trading, many people simply don’t know what they don’t know. But by participating in a trading education program, even everyday investors can gain insights into the many ways that money is made and lost in today’s markets. With that information, they’ll be better prepared to face the ever-changing realities of today’s markets and more likely to emerge on the other side as stronger, more capable investors.
It’s a lesson that mass-market retailers learned a generation ago: white-label products sell.
Grocery stores offer store-brand versions of everything from cereal to pasta sauce for less than the bigger names, consumer electronics retailers sell customers on lower priced generic components, and even small banks are increasingly outsourcing back office functions such as check processing to white-label providers.
In all cases, though, the concept is the same: take a product or service that’s been developed by one company and market it under another company’s brand name. It gives the reseller a product they can sell without having to invest time and money in product development, and it gives the manufacturer or developer a new outlet for their product with a ready-made revenue stream.
Even software companies offer white label solutions.
Often referred to as Software as a Service or Infrastructure as a Service, white label software allows customers to resell software packages under their own brands, building their own customer base while adjusting the look, feel, and sometimes even the functionality of the software to meet their needs. This type of arrangement has become common in digital marketing, customer service, market research and other industries in which business-to-business software packages are adjusted and rebranded for more consumer-facing audiences.
The benefits for brokers
“Companies using white label software apply it in one of two ways: Either to start a new business, taking advantage of the low start-up costs, or to expand the services of an existing company,” writes Bryan Rainey, the CEO and founder of ValidBrands, a white label software services directory, on his company’s blog. “Existing companies may be looking to add a new services or enhance those services already in place.”
Either way, white label software enables businesses to bring high quality, highly scalable digital products to market quickly and easily.
“This is crucial in an industry that requires speed of product deployment to stay competitive,” Rainey says.
For brokers, white label software has emerged as a popular tool for building and deploying client-facing trading platforms, allowing providers to offer their clients a software solution that doesn’t sacrifice anything in the way of features or functionality. This is critical for small and independent brokers because it allows them to compete directly against the major players and the more established houses immediately, without having to invest in expensive IT development services.
Truth is, technology means a lot when it comes to winning and retaining customers. The good news is that now even the smallest of operators can afford to offer their clients a world-class trading experience.
The in-house alternative
In fact, white label software actually makes more sense for most brokers than in-house development, according to Drew Gainor with the Young Entrepreneurs Council. Custom software—while seemingly an ideal solution on paper, allowing the broker to get exactly the product that they want for their clients—is an ill suited solution for what most in the industry actually need.
It’s extra work: Why spend time and money reinventing the wheel when others have come before you and worked out all of the kinks?
It’s slow: Software development takes time, and debugging all of that software once it’s finished can drag the process out even more. All of that delays your time to market, and increases the possibility that you’ll miss out on critical opportunities in the market while you build out your software platform.
It’s expensive: The costs for software development can add up quickly, and the final bills for custom solutions can be significant. It’s also wasteful. Why develop proprietary tools and solutions to suit your needs when similar products already exist?
It doesn’t include the specialized support you need: Any qualified software developer can build you the product that you want, but will they be around to support you a year or more down the line when you need to make adjustments or changes? And, if they aren’t experts in your industry, will they be able to recommend upgrades and additional features to maintain your leadership position? They’ll build what you ask them to, but will they know enough to design the features you don’t know you need yet?
On the other hand, a white label trading software offers a turnkey solution for brokers looking to get up and running with minimal fuss and downtime. Consider the advantages of the typical white label package:
It looks like it’s yours: Even though its an off-the-shelf product, a good white label software package is easy to brand and customize as your own, fully integrating into your existing digital systems complete with your logos, copy and look and feel. Future changes are just as easy, as many white label developers are willing to make custom adjustments as users’ business needs change and evolve over time.
It’s cheaper and easier to deploy: Developing proprietary trading software for your brokerage is a little like ordering custom cabinets for your kitchen. They might be great, but the prefabricated cabinets from the home improvement store will get the job done just as well and for a fraction of the cost. And don’t forget that custom software requires extensive testing and debugging after it has been installed, time that you’ll be paying for as well. White label software is effectively ready to go on day one, with all of the kinks and pitfalls already ironed out. All you have to do is customize it to your needs and go.
It’s hands off: Brokers are not software engineers. They have better things to do with their time than project manage their trading software packages. But software implementation is what white label firms do every day. They’ve integrated their tools many times and know exactly what needs to be done in order to get the job done right, on time and on budget, the first time.
At the end of the day, white label software allows brokers to focus on building their brands and their businesses, without spending excessive time and money on software development. What’s more, white label platforms often deliver a better, more effective product than custom-designed software, and one that’s future-proof as your business grows.
Choosing a provider
But, just as all software developers are not created equal, so too are there many choices on the market when it comes to white label offerings.
Some products are better suited to enterprise users, while others are dialed in for independent brokers. Be sure you know what you’re getting when choosing white label software or outsourcing any technology development services.
What should you consider when choosing a provider for the white labeled software for your brokerage?
Do they know the industry? One of the primary benefits of white label trading software is access to knowledgeable, expert developers who know the financial services industry inside and out and can tell you not only what your competitors are doing but what you need to do to stay ahead of the curve. They can also help you better understand what today’s customers are looking for from trading software and make sure that your firm’s implementation measures up.
Is their product easy to customize with your brand? When choosing a white label software provider, you need to consider both the front end look and feel of the product as well as the administrative tools on the back end that you’ll be using on a regular basis. How easy is the software to customize with your logo and copy? How many options do you have access to when personalizing the package for your business? And, perhaps most importantly, how seamlessly will it integrate with your existing systems?
Is the user experience a positive one? You want a trading tool that you clients will be happy using and not one that they feel holds them back or is a chore to use. It should be seamless and intuitive for them, including everything from the account management tools to the support information. Can your provider offer this?
Are their costs reasonable? Among the many advantages of white label software, it’s important not to overlook the significant cost savings that comes with off-the-shelf trading software. But are you saving enough versus developing your own custom platform? Make sure the products and services you get from your provider live up to the fees they charge for them. And shop around, as contract fees can vary from provider to provider, depending on the specific services you need.
What kind of support do they offer? No white label software contract should be considered complete without a significant ongoing support agreement in place. This is their software that you’re going to be using, you need to know that they will be available to help with any concerns or issue that you may have with it. Further, they should also be actively developing new services and features for the software that you will be able to take advantage of going forward. Will they be there to help you grow and scale your installation as your business grows?
What do you think? Have you used a white label trading platform at your brokerage and been happy with it? Do you think it’s a good solution for independent brokers?
It’s no secret that investment in FinTech companies has gone parabolic in recent years—jumping more than 3x between 2013 and 2014 to surpass $12 billion—transforming not only the back office functions of the financial services industry, but reinventing how the rest of us interact with our money on a daily basis.
Accenture has called FinTech—particularly those startups that deal in consumer lending, payments processing, and commercial lending—one of the most promising industries of 2015, and Goldman Sachs has estimated that startups in the space could eventually siphon off as much as $4.7 billion in annual revenue from the traditional financial services players. Venture investment in the sector grew by more than 200% globally in 2014, compared just 60% in the venture funding space overall, with the size of those first-round checks jumping by an impressive 48% in just one years’ time.
The FinTech sector currently enjoys a lighter level of regulation than more traditional financial services providers, in part because the oversight agencies are still trying to sort out just what makes a “FinTech” company a “financial services provider” and how, if at all, they should be handled differently than banks, brokerages and all the rest. This will have implications for not only the established banks, but also online brokers like TD Ameritrade and E*Trade, which straddle the line between traditional financial services firms and FinTech. Even though they’re tech trading platforms, they’re still registered U.S. broker dealers and are, as such, subject to the Securities Exchange Act of 1934 and all of the various rules set out by the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The concern for many in the larger financial services industry is that FinTech start-ups still aren’t playing by the same rules that the rest of the traditional banking sector has to deal with. That’s given the tech upstarts an effective advantage against their entrenched (and well-funded) competition that has helped them get established, but as the market matures it is starting to look and feel like an unfair advantage.
“We want to make sure we have a level playing field,” Rob Nichols, the president and chief executive of the American Banking Association told CNBC when asked about the potential for FinTech regulation in 2016. “This is a rapidly growing area where people are going to receive their financial products and tools in a very different way. We want it to be more efficient and effective. We need it to be safe and secure … there are cyber implications and security implications.”
For regulators, these new startups are a different animal in large part because they are using technology to beat the banks at their own game, taking their products and services directly to consumers. The questions now are “who should be able to provide financial services or products?” “Can the low start-up costs that have lead to these new businesses exist with compliance costs?” And, “can regulation even keep up with the speed and agility of these new business models?”
“These future issues impacting (the) banking sector are really big and important,” Nichols said. “One is this issue of FinTech and rapid convergence of banking and technology products. You know, I know, that my children are going to receive banking products in a way very differently from the way (we do now). I don’t know exactly what that will look like, but there will be regulatory implications there that we need to think about. This whole issue of mobile, you know there is so much that is going to the phone and to the smartphone. What will that look like in five or 10 years? What impact will that have on the banking sector?”
And with new compliance standards come new risks for all involved, too.
Writing in The Washington Post, author Larry Downes said that many of the traditional financial services companies that he works with have been openly complaining about start-ups in the industry that don’t have to play by the same rules as the rest.
“But as we’ve seen in industries as different as transportation (Uber) and hospitality (Airbnb), it’s a short step from envying the start-ups to applying pressure on the regulators to throw the book at them — even when doing so kills innovation consumers want,” he writes. “Banking incumbents have likewise become adept at turning regulations that slow their own innovation into effective barriers blocking FinTech startups from launching new products and services.”
Of course, not all regulations are bad. They exist for good reasons, are usually drafted with the best of intentions, and, love them or hate them, are simply a fact of life in the financial services industry. FinTech is no exception. (In fact, many FinTech companies have been pushing for increased government oversight of their activities for years, if for no other reason than to remove any potential ambiguity about what changes might be coming.)
What to expect
Like it or not, increased regulation is on the way.
And the industry knows it. According to a November 2015 survey by Silicon Valley Bank, pending regulation is the number-one concern on the mind of FinTech executives, accounting for 43% of responses.
What they don’t yet know is what those regulations are going to look like or how they will be enforced. The only thing that is clear is that change is coming. There are some educated guesses out there, though.
Here’s what is keeping FinTech leaders up at night:
One of the key advantages that many FinTech companies enjoy is an ability to reach a global customer base and not be limited regionally like a brick-and-mortar bank would have been. This is simply a fact of life on the Internet; your reach is worldwide.
For financial services firms, however, global operations can be an extra headache, introducing differing (and in some case, conflicting) standards between countries and jurisdictions. For years, the answer has been to establish operations in some areas and not in others, simply avoiding the issue.
But FinTech doesn’t have this option, for the most part. Since it can effectively be everywhere it faces tougher hurdles in NOT being everywhere. That’s why many in the industry expect to see new, global standards that apply to financial technology firms in the near future. This would not only clarify what FinTech firms can offer and where, but how regulators across countries deal with these new technologies.
New licensing requirements:
As it stands right now, establishing a new bank or financial services firm in the U.S. is a fairly straightforward process. You identify your market, gather the necessary capital, apply to the necessary regulatory agency and, once approved, open your doors for business.
The trouble for FinTech companies and other nontraditional lenders is that the regulatory step still is not very clear for them. Not only do they know how to shoehorn them into compliance with rules that were not designed with their business models in mind, the regulators don’t know what to do with them when they cross their desks. These new providers don’t fit the traditional mold of what a “bank” or a “financial services provider” should look like, so they can be difficult to regulate under existing rules. This isn’t working for anyone.
The best-case scenario is that this confusion simply delays a FinTech start-up’s application with the agency. Worst case, regulators shut them down before they can even get to work, simply because they do not have a way to understand or rate their business. New, FinTech-specific requirement should help alleviate this hurdle.
Capital levels first came to wide public attention following the 2008 market crash, when government regulators began calling for stricter capital controls and tighter cash-on-hand requirements for the so-called “too big to fail” players. For FinTech companies, however, these requirements don’t exactly make sense.
For example, a bank may be required to hold a certain percentage of its capital in reserves by its regulators in order to prevent it from taking on too much leverage and putting its deposit accounts at risk. But how would these regulations work with a peer-to-peer provider like Lending Club, whose “capital” only really exists in the form of the loans it facilitates between individual lenders and borrowers. Is Lending Club a bank or simply a platform or digital service? Expect clarity on these issues soon.
And of course there are always taxes to think about. In the U.S., banks and financial services firms pay taxes on any income just like any other corporation. The same holds true for FinTech firms—in fact, taxation is one area where fintech is pretty much on the same level as the rest of the industry—which are taxed on their corporate profits.
But, again, the technological business models being created by FinTech firms introduces some confusion. By facilitating loans between private individuals and borrowers, should Lending Club be taxed solely on the fee income it generates (as it is now) or should the investment returns on its platform come into play? Is it a bank or simply a platform?
The FinTech sector will most certainly continue growing in 2016—likely at the same breakneck pace—but what the regulatory landscape surrounding the industry will look like a year from now remains to be seen.
What do you think? What potential regulatory changes do you see for the FinTech sector in 2016 and beyond, and which, if any, concern you the most?
We are proud to annonce that our very own ETNA Trader has been selected among the top FinTech firms for ALPHA Class at the Web Summit 2015 in Dublin, Ireland. Meet the ETNA Team at stand number Downtown in the D196 Area on Day 1 of the event, Tuesday, November 3 (A map of the venue can be viewed here)
Web Summit is called “the best technology conference on the planet”. It is also one the biggest tech events of the year, “where the Tech world meets”.
22,000 attendees from Fortune 500 companies to the world’s most exciting startups
800 world renowned speakers
200+ satellite events,
800 of the best tech journalists.
The ALPHA class is a prestigious program giving a chance to the most innovative startups to exhibit at the 3-days event and to meet the best international media, investors and corporates.
The who’s who of the tech world will be attending and we’re thrilled to join the global community of innovators. Along with the live demos of the ETNA Trader, we will be providing onsite consultations on using ETNA’s API for FinTech startups.
We are looking forward to meeting you at the Web Summit. To schedule a conversation or an interview, send us a message and we’ll get back to you shortly.
ETNA is proud to see 2 our partners Tradier and qbeats among demoing companies at a recent FinTech Startups Meetup on September 2,2015.
Tradier is a financial services cloud provider that offers the first brokerage API to serve platform providers. The Tradier solution features an innovative set of fully hosted API’s, modules and “out of the box” tools that are leveraged by a growing list of providers.
ETNA and Tradier has been partners since early 2013 when ETNA provided key software components to accelerate Tradier’s product launch.
We are impressed with Tradier’s success and excited to watch their client base growing daily.
qbeats is a content valuation system that dynamically prices information and provides robust tools for monetization. Its flagship product Winqs is a content delivery solution that enables traders to access a wide array of premium news and research, on a pay-2-read basis with no subscription required.
Joel Kandy, VP of Business Development at qbeats shows winqs widget in ETNA Trader
Winqs was one of the first widgets integrated into ETNA Trader platform, making it possible for ETNA clients and prospects to purchase relevant pieces of premium financial content without a subscription.
Other demoing companies were:
Inovance – cloud-based, big data analytics platform, TRAIDE, allowing retail and professional traders to easily discover profitable entry and exit signals
Polly Portfolio – personal wealth management platform which empowers individual investors with institutional-grade investment technology.
yhat – data science technology company that provides tools and systems that allows enterprises to turn data insights into data-driven products.
ETNA will be making its way to Charlotte, North Carolina for the FinCon 2015 expo and we’re inviting you to join us! The event will span September 17th-18th and will attract the likes of FinTech companies, media outlets, brokers, traders, and anyone interested in Finance or Media.
You can find ETNA booth at the Expo Hall open on Sept 17 from 1 pm to 4 pm and Sept 18 from 10 am to 4 pm. ETNA Team will be doing live demos of the ETNA Trader Application Suite, giving free personal consultations for anyone looking to enhance their business by offering the cutting edge in web based trading technologies.
To schedule a meeting while we’re there, send us a message and we’ll get back to you shortly.
ETNA is the creator of ETNA Trader, a white label and web based trading platform used by brokers, developers, and trading firms. Along with an HTML5 based front end, we have iOS and Android mobile apps that accelerate our clients time to market and enable new business opportunities.
FinCon is a peer conference for the money media community. At the annual event each Fall, attendees connect with others in the community, learn to create, promote, and profit from compelling online content, and discover new trends in personal finance and investing. Originally called the Financial Blogger Conference, the event was shortened to simply “FinCon” to reflect changes to the scope of the attendees.
Meet us at Booth #231 for onsite demos of ETNA Trader, a next gen white label online trading and brokerage platform for broker dealers and FinTech firms.
ETNA Trader features customizable HTML5 front end, mobile trading apps, OMS and cloud back office with user accounts management, risk and regulatory compliance.
ETNA’s affordable leasing plans help brokers to attract new users, increase users retention and stay competitive by offering best online trading experience available on the market.
FinTech, companies launching new software products, use ETNA Trader both as an all-in-one HTML5 trading platform or as a foundation for new products. Our partners rebrand the platform and build their unique offerings on top of it, focusing on their main idea rather than the underlying technology.
Stop by and take a look at the future of online trading technology. ETNA booth #231 will be open on June 3 from 10:00 am to 5:30 pm and June 4 from 8:00 am to 3:15 pm at the Navy Pier, Chicago, IL. For more information about ETNA’s product and services, please visit www.etnasoft.com
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ETNA will be exhibiting at the upcoming Benzinga Fintech Awards Gala on Wednesday, April 8, 2015 at Tribeca Three Sixty, New York. This is a FinTech event hosted by Benzinga to honor the best companies within the industry.
As a leading technology provider for the financial services industry, the ETNA team will be showcasing its cutting edge technologies for capital markets. Meet us at booth #7 for the live demos of ETNA Trader, a white label, HTML5 web and mobile trading platform that features customizable front end, mobile trading apps, OMS and cloud back office. The platform is designed to be easily customized for broker dealers, trading firms, FinTech software vendors and services providers.
For companies looking to launch new financial software products or upgrade their existing trading environment, ETNA’s team will be speaking on how ETNA Trader can be utilized to shorten their route to market and save precious time and money.
Let’s talk! Join us at the Benzinga Fintech Awards Gala on April 8, 2015, 4 to 9 pm at Tribeca Three Sixty, New York. For more information about ETNA’s product and services, please visit ETNA.
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