Customer Onboarding Challenges Of Forex Trading Houses

Customer Onboarding Challenges Of Forex Trading Houses

Ever since Forex became attractive to retail investors in the late 1990s, the Forex market has grown 2.5x faster than the global GDP.

Today, Forex is the largest and most liquid market in the world. Currently, $5.3 trillion are traded every day in the Forex market, with retail investors contributing over $250 billion of the total daily turnover.

So, What Has Made Online Forex Popular Among Investors?
  1. Accessibility:

    Most Forex trading houses operate online, so investors can start trading from as low as $100. Investors just have to register, submit their documents, and start the process.
  2. Technology advancement:

    Third-party software providers offer plug-ins and add-ons that make Forex trading easier.
  3. Highly regulated:

    Forex trading is heavily regulated by more than one authority. This makes it a safe platform for even new investors to start trading.

  4. Low entry barriers:

    The best part about Forex trading is that it allows investors to start trading risk-free with a demo market before going live. This will enable investors to test their trading strategies without losing money. Once they learn the strategy, they can trade in a live environment. Of course, they could also start as small as they wish.

While Forex trading offers so many benefits, trading houses do seem to struggle in onboarding customers. Why is that?

According to HubSpot, 75% of your new customers will leave a platform within the first week if they are not onboarded correctly. Customer onboarding is crucial for the success of any business that depends on customer participation. This is obviously true for a trading house that really starts to make money only when the trades start stacking up. Customers should feel as special as they felt when companies tried to acquire them.

However, as with all Fintech companies, Forex trading houses also face customer onboarding challenges.

Customer Onboarding Challenges
  1. Delay in KYC and AML processing

    Forex trading houses are very strict about Know Your Customer (KYC) and Anti-Money Laundering (AML) processes. They follow these procedures diligently, conduct AML inspections on all clients to ensure that they are compliant and do not have any history of financial crimes. While these procedures are essential, a survey by Thompson Reuters revealed that 30% of respondents took over two months to complete the KYC process. 10% of them took over four months. This creates a problem in customer experience and most customers abandon the process mid-way..
  2. Lack of real-time data

    Forex is a 24-hour activity. When one market closes, the other opens. Sometimes the market conditions could also become highly volatile and lead investors to losses if not continuously monitored. The lack of easy-to-consume real-time data makes it more difficult for new investors to keep a close tab on the market movement. They find it overwhelming to monitor all the information and the price fluctuations that happen throughout the day. This leads to a bad experience for the investors, especially if they are new to trading and do it as a part-time activity to earn extra income..
  3. Information support

    Another challenge is that a paucity of of information leads investors, especially new investors, to indulge in emotional trading. That means that they trade based on fear or greed or driven by visible trends and not based on data and logic. This can lead investors to massive losses. Investors not fully aware of the volatility in Forex trading can suffer great damage. The challenge for trading house onboarding such traders is how to provide them a consistent, structured, and reliable source of information to guide their trades. More success in their trades will drive more trades in a virtuous cycle.

  4. Lack of 3rd party integration with other platforms

    Apart from the usual equities and debts, many forex investors also like to trade in other asset classes such as cryptocurrencies, commodities, futures, and derivatives. The ecosystem many investors depend on is complex. In many cases, such investors consume information from a variety of news sources. They may pull in funds from a variety of bank accounts. Portfolios may be tracked through an array of wealth management tools. To facilitate their trading, Forex trading houses must allow third-party integrations with other platforms using Application Programmable Interface (API).Lack of third-party integrations can limit the investor’s scope to keep track of their trading and hurt their experience.
  5. Lack of information

    Trading houses often offer a tiered experience for investors. Some tiers are free, and others offer an increasing number of features. The first challenge that a new investor faces while opening a trading account is to determine which account to choose. The trading conditions vary for different types of accounts. Even the minimum deposit varies. It is believed that the more the minimum deposit, the better is the trading conditions w.r.t fees and bonuses. New investors often do not receive such information while choosing an account type.
What Can Trading Houses Do To Solve These Issues?

Trading houses must harness the power of technology to solve these customer onboarding issues. Platforms such as Broker365 can make the onboarding process easy. From simplifying the KYC process, providing API integrations, providing real-time analytics, personalized alerts, and offering e-wallets to withdraw and deposit funds across multiple accounts. Forex trading houses must try several strategies to retain customers on their platform. Forex trading houses should think of ways to automate the end-to-end onboarding process and improve transparency, increase customer loyalty, and reduce trading risks. It’s time for trading houses to make the onboarding experience seamless and hassle-free for traders.