Devexperts was founded in 2002 and specializes in the development of highly sophisticated software solutions and services for the Financial Markets industry. In May the firm launched its all-new SaaS platform solution, DXtrade. We recently touched base with Evgeny Sorokin, SVP of Software Engineering at Devexperts, to discuss this new product, the state of the retail trading industry, the challenges of Covid-19, and more.
There’s been a lot of talk about your new DXtrade platform this year, can you tell us about it?
It would be my pleasure. DXtrade is a new software as a service trading platform from Devexperts. It’s entirely web-based, providing users the same great trading experience across all operating systems and devices. For brokers, this means that maintenance can be left entirely to our highly capable team. The interface itself is based on widgets, so it’s highly customisable. Brokers can choose to configure custom layouts for different clients, and users can set it up in a way that best fits their own trading workflow. This modular approach also allows us to continue releasing new widgets that add functionality to the platform as well as a suite of exclusive trading tools and technical indicators.
How is DXtrade different to what’s already on the market?
At Devexperts, we’re big believers in providing greater control and flexibility to brokers. As a custom development house, our technology has always reflected this. We’ve gained a great deal of experience over the years in building platforms from the ground up that function precisely as institutions require them to. This is the spirit we’ve brought to DXtrade. It’s software as a service, but it’s definitely not one size fits all. With this project, we wanted to bring our bespoke sensibilities to the retail FX/CFD market.
As you probably already know, it’s incredibly difficult for brokers to stand out from the crowd in this market and DXtrade has been designed to address this issue. The central idea is that it can be tailored specifically to groups of users. So, for instance, European traders can get a different look and feel from Asian traders, with different symbols and marketing campaigns.
On the back-end, the platform gives brokers the kind of control they’ve long dreamed of and have only thus far been able to achieve by patching together messy arrays of third-party solutions and getting them to all play nicely with their existing platforms. DXtrade provides them with all the functionality they will ever need right out of the box. Whether it’s the ability to apply margin, spread and limit profiles on a per instrument, group, or even individual account basis, or the ability to run a combination of risk management strategies and change them on the fly according to their needs.
Why have you decided to launch a new platform product at this time?
Devexperts is in somewhat of a unique position. In our almost twenty years as a vendor, we’ve built around 40 trading platforms from scratch for various brokerages and other financial institutions. This means that not only are we aware of how the landscape has changed since the early days of the industry, but we’ve also gained quite a thorough understanding of the pain points of all kinds of different financial services firms.
We understand what works for them in the established offerings, what doesn’t, what they wish they could change but can’t, as well as their reasons for sticking with tried and tested solutions despite them starting to show their age. Then there’s also the fact that a large number of our employees are actually veterans of the online trading industry and so are intimately acquainted with the ways that brokers are forced to work around the limitations of many of the existing offerings. The fact that the retail CFD market is long overdue a shake-up in its trading platforms is not really news to anyone. The difference is that we believe we’re in a position to do something about it.
Who are you intending to target with DXtrade?
DXtrade has been designed for both new and existing FX/CFD and crypto brokers in mind. Each contingent comes with it own unique sets of needs, requirements and problems to solve. Startups who opt to make DXtrade the backbone of their businesses get to build their entire offering around the platform. Its advanced functionality can be integrated from the start to aid in the communication of key departments, including dealing, back office and marketing.
For established brokers it’s an opportunity to revamp their existing offering to leverage all the benefits that DXtrade confers, as well as the ability to attract new clients, retain old ones and generally create a buzz around a new product offering. Crypto is another exciting market we’re working in. Crypto brokers have been incredibly bold in the past few years. They have entered the trading arena with a new asset class, a new way of doing things, and have not followed the tried and tested formulas of the online CFD industry. That said, platform quality differs widely in terms of functionality and usability in this segment, so I think DXtrade has a great deal to offer there as well.
This is a bit of a departure for Devexperts isn’t it? What has influenced your decision to launch a SaaS trading platform for retail brokers?
The retail trading platform segment has been somewhat stagnant for years. In our usual line of business, we’ve observed a gap between the kinds of development projects that are within the scope of retail brokerages and those more suitable for the larger financial institutions. This gap, in terms of lead time and budget, is partly why there’s been such a paucity of platform development in the space. So we decided to fill this gap by developing the platform ourselves rather than waiting for a prospective client to commission it. In doing so, we hope to give the industry a fresh look and feel as well as eliminating the ways in which brokerages have historically been so heavily reliant on third-party solutions.
Prior to this move, we weren’t all that focused on the OTC space. We were much more interested in larger scale development and implementations. In a way, we have tended to be a sort of incubator of new ideas as clients come to us with crazy new projects that we then attempt to turn into a reality. Of course, this isn’t suitable for all businesses. So with DXtrade we’ve put our experience and knowledge to use on a much more affordable SaaS platform that can solve real problems in the industry and get more people acquainted with the Devexperts brand.
Why do you think it’s been so difficult for newer trading platforms to oust the established players in retail FX?
There are many reasons why no one has managed to successfully unseat the usual suspects. The most obvious of which is that when a recipe is working, there’s not much of an incentive to change it. It’s the old “if it ain’t broke, don’t fix it” adage. The online FX industry has been so enormously successful at what it does that the platforms themselves have become an integral part of the formula itself. This is why over the years you can observe a certain online brokerage template emerging; with the same website styles, copy, product offerings and, of course, the same few trading platforms.
We’ve seen numerous outfits attempt to come to market with something fresh only to witness these projects dying on the vine, so to speak. Sometimes a new broker will enter the fray, eager to develop their own proprietary solution. They’re often full of good ideas and an exciting vision of the future, but without the in-house technical know-how to see these projects through, or the budget to outsource the job to experts.
Also, you have to keep in mind that in online trading things tend to move at the speed of a brokerage’s marketing department. Newcomers can be unrealistic in their expectations. They often learn the hard way that web development, design and content creation can be completed at a certain time frame and at a certain cost, whereas development of a completely new trading infrastructure is quite another undertaking that requires an entirely different time horizon and orders of magnitude more in terms of resources. When the penny eventually drops as the launch date draws near, many are often forced to scale down their expectations and go for the same old off-the-shelf-solutions as their competitors.
Does the fact that so many brokers rely on the same platforms make it easier for new brokers to follow suit?
Definitely. There’s undoubtedly a self-fulfilling element to the whole process, and you can see it most clearly in the way that so many brokers have the same old platform pages advertising the same old trading platforms that traders have been using for well over a decade. It’s almost an admission of the industry’s inability to innovate on this front.
Consider the fact that the platforms I’m referring to have been around since the mid 2000s. That’s when we first saw services like Facebook, YouTube and Twitter launching, as well as game-changing products like the first iPhone. Now think of how many iterations the above products and services have gone through since their inception, and how far the online world has evolved since then. You start to get a sense that online FX has become stuck in a rut as far as its trading platforms are concerned.
Acquisition and retention are a perennial concern for FX brokers. How have you addressed these issues in the development of DXtrade?
I think that customisability is key as far as acquisition and retention are concerned. Each brokerage has a slightly different way of doing things. The trading infrastructure they choose should offer them the flexibility to conduct business in their own way rather than hamstringing them to a single approach dictated by their platform’s functionality.
The power of DXtrade is in its ability to offer a customisable experience on both the client-facing side and the back-end. Marketing campaigns can be tailored to the geographical location of a broker’s traders, or using other criteria such as account tiers and so on. Rebates and commissions are extremely easy to manage and apply for affiliates and IBs.
A product launch such as this can’t have been easy during a global pandemic. What has your experience been?
It has not been without its challenges. Initially, we planned to launch just before the lockdowns started being implemented globally. As is often the case with product launches of this kind, you’re often looking to generate online interest in the run-up to the launch, which you can then bolster in person on the annual expo circuit. In this way there’s a general building of awareness that can then be given a human face by touching base with our staff, presentations, demonstrations and so on. It quickly became apparent that travel was going to be off the table in 2020 and so this year’s conferences have been cancelled. Rather than delaying the launch, we decided to shift our attention solely to online. This has meant more content creation and online demonstrations.
How have Devexperts and dxFeed been working during the pandemic?
Our teams were accustomed to working effectively and coordinating at a distance well before Covid. In this respect it’s pretty much been business as usual for us. We have offices in Europe, the US, Turkey, Singapore and the UK. It wasn’t much of a stretch from that to allow members of staff in certain locales to observe the social distancing guidelines that applied to their region. Our team is great in this respect. They know what they have to do and they get it done, irrespective of what’s happening in the world at large.
Brokerages were reporting greatly increased volumes throughout the pandemic, particularly during the lockdowns when market volatility saw a sharp increase. Has this situation benefited you in any way?
It’s actually been a blessing in disguise. Before the volatility we were engaged in conveying certain features of our technology to brokers, such as how our systems are engineered and stress tested to handle incredible loads during peak volatility, or the sophisticated manner that our price feeds are able to make the most out of every ounce of bandwidth when loads are high.
Before the recent crash, the message we were attempting to convey was being received in a largely theoretical way. After all, the last time decision makers had experienced anything even close to what we saw in March and April was back in 2015 during the SNB black swan event. I think the experience of online brokerages during this Covid crash has been sobering for them. It has highlighted the vulnerabilities of their existing systems and made a strong case for our technology.
It’s human nature to downplay risks when everything’s working fine, but it’s during unexpected events that vulnerabilities come to the surface, and so I believe a lot of the online work we’ve been doing this year to explain the strengths of our technology has just been made a lot more relevant.
How are your systems better able to handle the increased pressure from unforeseen market events like we’ve seen this year?
It’s a combination of front and back-end optimisations that, taken as a whole, lend our systems the robustness and resilience that modern markets demand. On the front end we employ transport protocols to prioritise traffic so that business-critical functions such as position entry, exit and management can be prioritised. We rely on a number of strategies during times of peak load to ease the strain on bandwidth and servers, such as using latest snapshots, as well as quote conflation and removal. Our sister company, dxFeed has been instrumental in this regard as their experience in providing price feeds to such a variety of market participants has been invaluable to us. On the back-end server modularity, using arrays and lists in method calls, garbage-free libraries and read-only objects in the entity framework can all improve efficiency when markets are melting down.
Testing, testing, and more testing is paramount in the development stage so that our systems can be routinely pushed beyond their maximum capacity in order to observe how performance deteriorates under such pressures and how long systems can maintain uptime before having to be restarted. The purpose of all this is to over-engineer our trading infrastructures so as to give them significant headroom compared to our rivals.
Speaking of dxFeed, did their teams experience any issues in their data storage and distribution services?
This recent bout of volatility has in many ways been a case study for the anti-fragility of their systems. The loads experienced, especially in certain asset classes and at certain times were amazing. However, the strategies outlined above, among others, have allowed dxFeed to maintain their quality of service despite the enormous pressures placed upon them.
dxFeed has also been able to provide real-time feeds from US and European exchanges to brokers without having to charge a per user fee for every broker’s client. This is a highly popular development allowing brokers to furnish their traders with real Level 2 order books, which weren’t previously possible.
Are there any other developments that you’d like to mention?
Our Gate45 system is quite an impressive development. It unites heterogeneous trading systems into a single unit, which has allowed brokers to automate a bunch of resource and labour intensive procedures such as risk management, anti fraud, scalping detection and ‘what if’ analysis, among other things.
This is at a time when resources have been at a premium and the influx of new traders have led to many brokers operating beyond their peak capacity. As with everything we’ve discussed so far, it’s a case of an unforeseen event pushing older technologies to breaking point while demonstrating first-hand the importance of the many innovations our companies have been tirelessly working on these past few years. We’re collectively working towards making the industry as a whole stronger, more efficient, resilient, and better able to meet the challenges of today’s markets.