Outsourcing in Forex: The things you need and want to know
In today’s forex software market, there are hundreds of different solutions to choose from that are ready to meet basic customer expectations. The problem is that not all of them can provide valuable data-driven behavioural insights to help your company evolve. In order to compete at the highest end of the industry, FX companies need to be equipped with the latest innovative technology that will allow them to generate more leads and grow their ROI. Without the right tools, a brokerage simply cannot enhance the quality of the provided services, drive innovation and operate successfully.
As developing and updating new technology in-house is challenging and expensive, forex companies have been turning to outsourcing for quite some time now. Outsourcing has allowed them to grow and keep up with most of fintech’s rapid developments and changes, without having to support a team of developers and at much lower costs.
The most popular outsource option that FX companies usually turn to is BPO (Business Process Outsourcing). In this case, FX companies pass on certain operations and responsibilities to third-party service providers. It is a rapidly growing field, that divides into two categories – back office outsourcing and front office outsourcing. It has a lot of benefits like saving on resources, higher efficiency, enhanced reporting and the ability to pick the most relevant service. However, it also makes you extra dependent on the service providers and the communication you have with them. Lack of proper communication may delay project closing and lead to bigger running costs of the service.
BPO can be offshore or nearshore. Offshore outsourcing is basically passing on operations to a service provider in any other country but your own. It offers FX companies more choice to pick the provider with the best price and expertise. All communications between the company and provider are handled via email, phone or VoIP. Nearshore outsourcing is the opposite. The provider is based close to the client company, which makes communication easier thanks to similar time-zones and the opportunity to hold actual physical meetings. Because of this, there is a much lower risk factor in end-product quality.
Usually, FX companies are mostly interested in outsourcing business operation support and advice support. This can include lead generation, call-centre operations, marketing, website development, investment management, product research, and financial planning.
By outsourcing, FX companies don’t just save money but get the opportunity to utilise their resources more effectively. They can focus on core business matters, rather than on spending unnecessary time on developing solutions without the core expertise required. The end product is also more likely to be of higher quality and will thus lead to better results.
But as with everything in life, outsourcing should be done wisely. Before jumping into it, a company must examine the service provider’s expertise, understand the project implementation strategy, make sure that the result will reflect expectations, and ensure that post-implementation support will be satisfactory. It needs to understand if the outsourced procedures are a source of competitive advantage and whether they will reduce risks. The main goal should be to find a scalable and flexible solution that fits in with essential internal operations and integrates accordingly.
Outsourcing is always a major change for any FX company and is mostly always about cost reduction. However, forecasts show that it won’t be the sole deciding factor in the years to come. In the near future, service providers will transform into partners and system integrators, sharing the risks with the client company, focusing on offering value, and forming a more trustworthy relationship. FX companies will make more and more use of multiple vendors, with expertise in each specific area needed, making outsourcing and insourcing a seamless function. All of these changes will impact the financial market globally and will establish new levels of transparency between FX companies and their outsourcing partners.
Author: Nadia Ivanova, PR & Digital Marketing Manager at Qobo Group Ltd