Risk management plugins for brokerage business

Author: Albina Zhdanova

Tools for Brokers has been on the Forex market for over 10 years. During that time we have witnessed many unpleasant situations that brokers have found themselves in, as well as we have prevented many crisis situations from happening. Our wide product range offers many solutions for various kinds of risks. In this article, we have listed the types of risks and TFB solutions that might help get rid of those risks.

Financial / Economic risks

Money is central in the brokerage business. In the Forex world, money is the end goal and the means to get to the goal. Traders and investors intrust their capital with the broker. Therefore, it is vital for the broker to know what they are doing, to fool-proof their processes, and to be up to speed with every aspect of their business. The risks follow brokers everywhere: leverage given to the clients, outdated quotes, margins, and negative balance — all of it can keep you up at night. Luckily, with the right skills and the right software, all of those problems can easily disappear.

At TFB, we have many solutions that became our partners’ favourites, such as:

1. Quotes Watcher plugin that protects from risks associated with outdated quotes trading.
2. Leverage Changer plugin that modifies the leverage of the account depending on the level of balance or equity, and helps control risks with large volume deals.
3. Margin Notification and Stop Out plugin that monitors and controls the clients' margin levels, and notifies brokers when it reaches a predefined threshold. That helps to close orders immediately in case if a client is losing money.
4. Negative Balance Protection plugin that prevents brokers from loss associated with trader’s balance dropping below zero.

Strategic risks

Success is hardly ever accidental. Usually, there is a strategy behind every successful business or individual. Every company has their own idea of what their strategy is, but we can all agree that increasing profits is likely to be a top-3 for most of them. A big role in growing profits for brokers is played by traders and their motivation to go online more often and trade in larger volumes.

Tools for Brokers designed two plugins that would help inspire traders to be more active. All that through a simple and automated system:

1. Credit Management plugin will automate the system of granting credits to the clients.
2. Multilevel agent commission (MLAC) is an app that will create hierarchical rebate structures using only MetaTrader Manager with an unlimited number of rebate levels and flexible payouts size.

Informations security risks

Information security seems to be on everyone’s mind these days. Yet, every other month there is news about a large enterprise that failed to protect clients’ data. It is best to learn from the mistakes of others and make sure you have the right tools in place to protect you:

1. Password Strength Plugin will check for you the passwords’ complexity, expiration dates and times, and it will also match new and old passwords to make sure you are protected.

Operational risks

Your risk management does not stop with the analysis of strategic and technological risks. After you have worked out a plan and implemented all the latest technology, the company continues to run with its’ day-to-day operations. And that is another area of potential catastrophes.

Yet we do not want you to panic — as there is, again, software that can mitigate all of the risks for you:

1. Manager Event Alerts is an app that notifies traders on different types of events that took place on their accounts.
2. Position Limit plugin enables brokers to limit total open position exposure by instrument and reject the position opening if the maximum limit is exceeded by account.
3. Database Migration Service - a must for migration: helps export data, archive it, and import to the target server.

Regulatory risks

If we said that regulation is fun, we would be lying. Constant reports, collecting all the data, and putting it all in the right format can scare anybody.

That is why we have created solutions that meet all the requirements of regulators and do all the work for you:

1. EOD (End-of-day) Report generates daily reports for regulators with full data on all trading accounts on the server for the last 24 hours.
2. Perf Attribution Report is an application for automated generation of reports in xlsx format weekly, monthly, or for the entire time period.

We hope that this article has helped you to identify what kind of risks are more relevant to you and give you an idea of how you can fix them. Please check our catalogue for full product list: https://t4b.com/catalogue/