This article was written by Jon Light, Head of OTC Platform at Devexperts

Introduction

Brokerage infrastructure has come a long way since the early days of the industry. Back then, brokers were largely locked into one or two trading platforms, customer relationship management was conducted via spreadsheets, and dealers managed risk manually, or were forced to use third-party workarounds in order to access the features they required.

Today, brokers are spoiled for choice, with a plethora of highly capable software solutions that span the front and back-ends of their respective operations, as well as their various departments. Further, these modern systems are now designed specifically for the idiosyncratic nature of FX/CFD trading, rather than being cobbled together and adapted to the task.

As a technology provider that’s active in this and other areas of the financial landscape, we have gained experience in both creating solutions, and also in integrating disparate software into smoothly functioning systems. In the following article we’d like to discuss what we believe brokers should consider when it comes to sourcing their back-office software in 2025 and beyond.

It’s bigger than customer relationships

Customer relationship management (CRM) software is central to brokerage operations. It forms the hub from which all relevant data pertaining to clients can be accessed by the various departments that require it. However, beyond just access, the ability for different roles within the organization to liaise with team members from other departments is paramount.

The big trend in CRM development for FX/CFD brokers over the past decade or so has been that CRMs have evolved to handle more than just relationship management between clients and client-facing departments such as customer service, sales, retention, and accounting.

Today’s CRMs can be regarded more as business intelligence suites, allowing for the acquisition of much richer data regarding client behavior, as well as collaboration between all key brokerage departments.

For new brokers in the process of sourcing CRM software, or existing firms planning to upgrade, the following are some key considerations and features to keep in mind.

Real-time analytics: Knowing what clients are doing in real-time is a massive competitive advantage. It can lead to efficiencies that contribute positively at various levels of the business. For example, sales and retention agents are able to provide pre-emptive support; building rapport, helping with conversions and deposits, and also freeing up customer service teams to deal with more pressing client problems.

Having access to real-time client data (as well as the ability to efficiently store and manage it) also empowers brokers to run advanced client segmentation strategies, allowing them to tailor their messages and be much more surgical in their marketing efforts.

Automated KYC/AML: This has been an important feature for brokerages as peak interest in trading tends to come in waves, inundating their systems and teams with incoming registrations at different points throughout the year. The ability to get what’s legally required from incoming clients before a human being is required to intervene is extremely important to brokers nowadays.

This can include connection to global compliance databases, integration with third-party compliance software, or native AI features designed to deal with the most common problems that new clients face when attempting to get verified for a fully funded account. Again, these are features that enable brokers to scale by being much more efficient and by maximizing their human capital for more important business functions.

Role-based access: As CRMs have grown to encompass all important back-office functions it has become more important for different departments (and different levels of authority within those departments) to be able to view the same clients at deeper levels of resolution.

For instance, a salesperson doesn’t (and shouldn’t) need access to a client’s personal information (including contact details), in order to perform their role. Also, they don’t need to have access to their colleagues' assigned leads, while their managers must be able to view the entire workflow of their teams.

Similarly, not every member of staff should have access to the trading histories of clients, but some staff are required to, such as senior customer support, and dealing department members. Role-based access, including effective use of encryption, is crucial to modern brokerages that want to protect their leads, their clients’ data, and be fully compliant with GDPR obligations.

The subtle art of managing risk

Today’s trading platforms come with powerful back-end software for managing brokerage exposure. These systems are business critical as they allow dealing staff to monitor client trading activity at various levels of resolution.

Similar to how client segmentation can open up more sophisticated marketing strategies, the ability to segment clients based on their differing trading behaviors and run a variety of different business models can contribute to much more effective risk management and brokerage profitability.

This includes being able to selectively internalize trades, forwarding them onto liquidity providers, and running strategies that allow for a combination of the two.

Additionally, a capable risk management system should allow brokers to hedge their positions with multiple liquidity providers, taking advantage of price differences between these venues in order to maximize cost effectiveness. This includes the ability to split individual orders between liquidity providers in order to keep execution within the most cost-effective liquidity tiers.

It’s also important for dealing teams to be able to have granular control over different parameters as they are applied to different groups of traders. These parameters include margin, spreads, limits, commissions and rebates.

The most capable risk management software will allow these parameters to be set on a per group, per instrument, or even on a per account basis. In other words, should a dealer be required to alter a given parameter affecting a client, or group of clients, they’re able to easily create a profile for which the required parameters apply, and then add the accounts that ought to belong to that profile. This functionality should be available on the fly, without requiring a server restart.

What else to keep in mind?

User experience: In software development, concerns regarding UX/UI tend to be reserved for client-facing software, rather than also considering those working on the back-end. This is a mistake as clunky interfaces make working with complex systems such as the ones outlined above, difficult, time-consuming, and fatiguing.

Brokerage efficiency is directly related to the productivity of team members and to how effectively they manage their tasks and are able to coordinate with each other. To this end, investing in flexible, well-designed, easy to use back-office software pays dividends in the long run.

Open APIs: We’ve discussed the importance of open APIs elsewhere, but it should be reiterated. Open APIs are important in avoiding vendor lock-in, as well as in allowing brokers to tailor software to their needs, and to easily integrate whatever third-party systems their business requires.

Using vendors that make their APIs public, and share adequate documentation regarding them, can be a boon when it comes to getting exactly what the business requires out of these systems.

Support and aftercare: Finally, the relationship shouldn’t end when the software is deployed. In order to respond adequately to technical issues and changes in the industry, it’s important to pick a software provider that guarantees on-going support and aftercare.

This includes being available at all times as per the requirements of international markets, providing software updates on an on-going basis, and also training the members of staff that will be tasked with using the software in question.

Conclusion

Today’s brokers are almost spoiled for choice when it comes to the software and features they have available to them. This great variety, however, means that careful consideration should be taken to assess the business’s individual needs and to source the right combination of software to ensure that all bases are covered, and that the business has more than enough headroom to continue to grow into the future.

Source: Finance Magnates