Legacy brokers resist cloud, concern non-institutional

The lack of cloud integration by the largest exchanges is causing worry for investors in the brokerage industry. Despite 90% of global businesses migrating to cloud technology for improved efficiency, scalability, and security, these exchanges have yet to follow suit. PayBitoPro‘s CEO, Raj Chowdhury, advises using cloud-integrated Brokerage as a Service (BaaS) as a solution.

Challenges Obstructing Financial Inclusivity

The lack of cloud integration in broker platforms results in significant limitations that hinder financial inclusivity. These limitations include costly and time-consuming registration processes that create barriers to entry for new retail brokers, as well as a lack of transparency and limited AI insights and algo trading capabilities.

• Hesitation in Embracing Cloud-Enabled Innovations like BaaS

Traditional brokerage platforms are not utilizing the advantages of cloud technology, resulting in them being unable to utilize Brokerage as a Service (BaaS), which is the future of brokerage platform architecture. BaaS simplifies the setup process, promotes financial inclusion, and is accessible to all demographics.

• Impediments to Achieving Financial Inclusion 

The stringent eligibility requirements of prevalent broker models create obstacles to financial inclusion, as non-institutional participants are unable to join their brokerage membership. Even after passing challenging examinations, brokers are not allowed to register as individual brokerage businesses and are forced to work under existing institutional players.

• Entry Barriers and Lengthy Setup Duration

The significant upfront costs associated with non-cloud broker platforms, such as NASDAQ, pose a substantial challenge for non-institutional enterprises looking to enter the brokerage business. With initial costs ranging from $5,000 to $500,000, and a registration process that takes at least six months, the setup time and financial burden can be daunting.

• Restricted AI-based Trading Strategies and Features

Major broker models worldwide have limited access to state-of-the-art AI trading tools, placing non-institutional traders at a disadvantage. Institutions use these innovations to produce steady returns that are impervious to human emotional biases.

• Transparency Challenges

Legacy broker models face transparency issues due to their opaque pricing and execution policies. With market makers doubling as brokers, potential conflicts of interest can arise, and the complex bidding system makes it challenging for investors to determine the best stock price.

• Safeguarding the Interests of Institutional Investors

Legacy broker models exhibit a bias towards institutional traders by safeguarding them from membership revocation, even in cases of illegal activities like insider trading and market manipulation. This approach leads to an oligopoly of dominant brokers who hold significant assets and influence, dictating the market and restricting the entry of smaller brokers.

CEO Speak

PayBitoPro chief and noted blockchain pioneer Raj Chowdhury states, “Innovation is the lifeblood of the finance industry. Firms that refuse to evolve to cloud integration risk losing out to competitors who prioritize agility and flexibility.”

Traditional broker models may experience adverse effects on their financial performance and cybersecurity practices. Thereafter, by resisting the integration of cloud technology. Therefore, this could lead to a decline in investor interest and a competitive disadvantage in comparison to firms that prioritize innovation and adaptability. Failure to keep up with technological advancements and evolving market trends can result in significant challenges for companies in the financial industry.

BaaS: The Succession of Brokerage

The financial industry is constantly changing, rendering prevalent broker models outdated. By embracing modern technology, brokerage platforms can enhance accessibility, reduce expenses, and eliminate entry barriers, promoting financial inclusivity. Therefore, this can attract new investors, traders, and foster innovation in the market.

The PayBitoPro chief recommends the following suggestions: 

• Encouraging Financial Inclusion through Cloud-Based BaaS Adoption

The adoption of a cloud-centric and BaaS model can overcome the limitations of conventional broker models. Thus, by providing cost-effective, easy-to-use, and on-demand brokerage services. Therefore, by removing coding and technical difficulties, such models can make brokerage accessible to everyone and promote financial inclusivity.

• Promoting Financial Inclusion by Cutting Costs and Setup Time

Contemporary broker platforms can eliminate hurdles to entry by decreasing setup costs and providing immediate brokerage services. Brokerage platforms with cloud integration, such as PayBitoPro, have simplified registration procedures and reduced setup costs to promote financial inclusivity. For a mere $49.99 per month, anyone with a computer and an interest in trading can utilize their services. Therefore, this creates an opportunity for untapped markets and demographics to engage in trading.

• Simplifying Operational Procedures for Enhanced Efficiency

To ensure impartiality and better regulatory oversight, conventional broker platforms must prioritize scalable brokerage services and financial inclusivity. Thereafter, by reducing costs, simplifying operational complexities, and relaxing eligibility criteria. Modern broker platforms provide rapid solutions by setting up bots within minutes and offering pre-purchase trial testing options. These tools can facilitate high-volume transactions and provide unbiased AI insights for brokers and traders to gain an advantage. The intuitive platforms also allow customers access to multiple trading options.

• Empowering Independent Brokerage through Tailored White-Label Solutions

PayBitoPro supports independent brokerage by offering customizable white-label solutions that allow retail entrepreneurs to create their own branded exchange with multiple features and customization options. This enables entrepreneurs to build their own brokerage enterprise with freedom and flexibility. Other broker platforms can provide similar white-label solutions to empower aspiring brokerage entrepreneurs and firms, offering free trials and self-branding capabilities.

• Maintaining Real-time Data Integrity with AI Implementation

Broker platforms can utilize artificial intelligence (AI) to enhance real-time data integrity, improve regulatory supervision, and promote transparency. AI-powered tools can detect and prevent insider trading by analyzing anonymous transactions, providing rankings, and conveying buy/sell signals. Therefore, providing an efficient solution for regulatory compliance.

• Advancing Trading with AI and Algorithmic Features

Current broker platforms offer algorithmic trading, enabling traders to utilize pre-designed or customized trading bots with adjustable algorithms. Moreover, algorithmic trading is accessible to all traders through modern brokerage platforms, such as PayBitoPro. Thereafter, which provides quick bot set-up, demo-testing options, and advanced trading strategies.

Brokering World Hunger Away

The Brokering World Hunger Away initiative is promoting a cause where associates can donate part of their commission to help feed malnourished children worldwide. Therefore, this initiative aims to provide equal opportunities and create economic stability without reducing brokers’ earnings.

Wrapping Up

In conclusion, the financial industry must take action to address the unequal access to next-gen AI trading tools and brokerage services. Legacy broker models, such as institutional brokerage, hinder financial inclusion and limit non-institutional traders’ access to these tools. Therefore, this lack of cloud-based solutions and financial inclusivity may hinder growth and competitiveness. To stay competitive, exchanges must prioritize innovation and inclusivity.

Source: https://www.benzinga.com/pressreleases/23/06/n32772859/legacy-broker-models-enable-insider-trading-and-market-manipulation-paybito-ceo-raj-chowdhury