Three excuses not to change your liquidity bridge

Author: Ivan Egorov

As we talk with different brokers, hedge fund managers, and peers in the industry, we naturally discuss new tools and solutions and their adoption into existing environments.

One of the things we hear from different people when discussing bridging is that they are not eager to try something new. As avid new technology lovers, we find this phenomenon fascinating. So, in this week's blog, we will dive into the reasoning and the consequences of staying with the old liquidity bridge.

There are three key excuses why brokers are not ready to change their liquidity gateway:

  • They are happy with their current bridge provider.
  • They are too deeply integrated to swap the bridges now.
  • They must ask permission from the current bridge provider every time they need to access the environment, making any testing or experiment difficult.

Do you recognise yourself in any of the three cases above? Then this article is for you!

Excuse 1: You are happy with your current bridge provider

It is indeed possible that you are fully satisfied with the functionality, stability, and usability of your current bridge, so you don't see any reason to change it.

However, it is important to remember that the market is constantly changing and releasing new technology to address the latest trends, requirements, and needs. So while you are happy with your existing infrastructure and setup, competitors can conquer new markets and possibly even attract customers away from your existing customer base.

Another interesting aspect to think about is the concept of the eggs and the basket. The main mantra of the financial world is that one should not put all of their eggs in one basket. Yet as brokers apply this recommendation to investments in stocks, currencies, bonds, etc., they often do not apply the same logic to their own decisions.

For example, if a broker only works with one bridge provider, they have higher risks that can easily be mitigated by diversifying across several liquidity bridges.

Excuse 2: You are too deeply integrated to change the bridge

You might be avoiding new technologies, including the liquidity bridge, because it's just too deeply integrated into your infrastructure and business processes, and even the thought of changing something hurts.

However, in most cases, technology providers are eager to support and guide brokers through the transition, making it less troublesome.

Here is what Tools for Brokers is offering to all clients:

  • Assistance with the migration to the new platform. We've outlined the whole process in one of our recent blog posts.
  • End-to-end testing before the migration or integration starts. We ensure that the system will work as intended and that there are no nasty surprises along the way.
  • A wide range of solutions to cover all needs and challenges. This guarantees that brokers will not be missing out on functionality they are used to after the move.
  • The flexibility of custom development to elevate the experience and meet unique requirements.
  • Compatibility with major regtech providers to guarantee the seamless integration of the regulatory reports with the new liquidity bridge.

Excuse 3: You do not have full access to the trading environment to install another bridge

When it comes to solutions where brokers and hedge funds have little to no access to their trading infrastructure, we believe that no benefits can compensate for lack of control.

Why do we see such situations as unfavorable?

  • Lack of access to their own trading environment makes companies heavily dependent on their provider. And when we talk about business, especially trading and finance, such dependency is a considerable risk.
  • With no control, brokers cannot adjust their setup to rapidly changing market conditions immediately when every minute might cost them a lot of money.
  • It's just inconvenient. Every little change in settings and configuration becomes a whole process if you can't just adjust things yourself. The longer it takes to perform simple activities, the more brokers risk missing out on opportunities that require those adjustments to begin with.

To conclude, migrating to a new bridge or implementing a second liquidity bridge in your environment is not as scary as it seems. The trusted technology providers will do their part to make the change easy and seamless, removing the main obstacles that stand in the way of following the trends, upgrading your risk management strategy, and providing traders with competitive deals that will make them stay with your brokerage.

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