In the forex market, white labeling is used for trading software, platforms, and other additional services that brokers may offer. One good reason why white labeling is gaining popularity in the FX market is that it benefits both the buyer and seller of the product. For product-makers, selling their software and platforms provides them additional income. For banks and brokers , white labeling saves them the cost of developing a new product that will attract new customers.
In addition, buying instead of developing new software makes it easier for the firm to encourage existing users to stay with the broker. For example, both Gain Capital and FXDD — two renowned retail forex brokers — advertise their white label programs on their websites.
Meanwhile, FXDD has focused on partnerships with new brokers, hedge funds, and money managers. The big banks are joining the party as well. This is as interesting development, as it highlights the ongoing trend of consolidation in the retail forex trading industry. The question is, what could this mean for the average forex retail trader?
On one hand, it could lead to better execution, as trading platforms will become more integrated with one another. The more that big banks tie up with the same brokers, the more liquidity and better execution we see in the markets. Also, product-makers provide dedicated technical and customer service teams to their clients. This should hopefully lead to better client-broker relationships. On the other hand, because brokers are now relying on third-party software, we could encounter the disadvantage of additional fees.
Did you think brokers would just allow you access to additional software and information at no cost? The additional costs would most likely be supplemented with additional administration fees or perhaps even wider spreads. What do you guys think of this trend in the retail forex trading industry? Hit me up with your thoughts and comments below! Partner Center Find a Broker. With a last name like Ninja, I decided long ago to specialize in espionage.
And with my first name being Forex, you guessed it, my other pasison was, well, anything and everything FX. Naturally, I decided to combine my two loves into one, "spying" on the forex industry which I call "espipionage. I also profile existing companies that are making an impact on retail forex traders, all for your benefit. Set your night vision goggles ON.
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