The PayBito Chief critiqued conventional exchange broker platforms, citing their negligence to cloud adoption deterring non-institutional brokers and financial inclusion.
PALO ALTO, Calif., April 20, 2023 /PRNewswire-PRWeb/ -- The world's largest exchanges have consistently avoided cloud integration, which concerns investors in the brokerage industry. Over 90% of global businesses have migrated to cloud technology, citing better efficiency, scalability, and security. PayBito CEO Raj Chowdhury pointed out their limitations, recommending a shift towards cloud-integrated Brokerage as a Service (BaaS).
Limitations Hindering Financial Inclusion:
Non-cloud broker platforms have significant limitations that exclude new retail brokers due to high costs and time-consuming registration processes, which create barriers to financial inclusivity. The platforms are also limited regarding AI insights, algo trading, and transparency.
- Rejecting Cloud-Based Innovations Such as BaaS
Conventional brokerage platforms fail to leverage cloud technology. As a result, they are missing out on Brokerage as a Service (BaaS) offerings- the next evolution of brokerage platform architecture. BaaS facilitates intermediary with Quick Sign-up features while eliminating complex setup hassles. They promote financial inclusion and are accessible to all demographics.
- Setbacks to Financial Inclusion
Legacy broker platforms have strict eligibility criteria restricting the entry of non-institutional participants in their brokerage membership. Even after clearing a challenging series of examinations, brokers need to work under existing institutional players, denying them the right to register an individual brokerage business.
- High Entry Costs and Setup Time
Non-cloud broker platforms have high initial setup cost requirements. For example, NASDAQ, the world's second-largest exchange, requires initial costs ranging anywhere between $5,000 to $500,000. This makes it difficult for non-institutional enterprises to venture into a brokerage business. The registration process is also time-consuming, with a minimum wait-in period of six months.
- Limited AI Insights and Trading Features
The major global broker models have limited access to cutting-edge AI trading tools. The deprivation of AI access puts non-institutional traders on uneven fields, as institutions leverage these innovations to generate consistent returns, immune to human emotional biases.
- Transparency Issues
Opaque pricing and execution policies have long been a concern with legacy broker models. Such brokers, which use market makers and brokers to facilitate trades, are prone to offer reduced visibility into order flow, and the potential for conflicts of interest to arise as market makers are also brokers. The complex system of bids and offers makes it difficult for investors to determine the best price for a stock and understand the volume of buying and selling activity.
- Protection for Institutional Investors
Legacy broker models are often biased towards institutional traders, protecting them from membership stripping despite being involved in illicit activities like insider trading and market manipulation. This approach creates an oligopoly of high-asset and powerful brokers dictating the market, leaving little room for smaller brokers.
The Implications of Cloud Aversion:
The PayBito Chief 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."
The refusal of conventional broker models to adopt cloud technology could negatively impact their financial performance and raise concerns about their cybersecurity practices. By resisting innovation, the firms risk falling behind their competitors and losing investors who prioritize strategic vision and flexibility. Companies that fail to adapt to new technologies and market trends may struggle to remain competitive in the rapidly changing financial industry.
Brokerage as a Service:
In the ever-evolving world of finance, traditional broker models are fast becoming outdated. By adopting a modern approach, broker platforms can democratize their brokerage services, reduce setup expenses, and eliminate entry barriers. This, in turn, can promote financial inclusivity, attract new traders and investors, and foster fresh ideas and strategies in the market.
Chowdhury proposes the following steps:
- Adoption of Cloud-Centric BaaS to Promote Inclusivity
Adopting a cloud-centric and BaaS model can address the shortcomings of legacy broker models by offering affordable, user-friendly, and instant access to brokerage services. By eliminating coding and technical complexities, such models can democratize brokerage and promote financial inclusivity.
- Reducing Costs and Setup Time for Financial Inclusion
Modern broker platforms can eliminate entry barriers by decreasing setup expenses and offering instantaneous brokerage services. Cloud-integrated broker platforms like PayBito have simplified the registration process and decreased setup expenses to promote financial inclusion. For as little as $49.99 per month, anyone with a computer and a passion for trading can access their services. This provides an avenue for newer markets and demographics to participate in trading.
- Streamlining Operational Procedures
To foster impartiality and greater regulatory supervision, traditional broker platforms must prioritize scalable brokerage services and financial inclusivity. This can be achieved by lowering costs, streamlining operational difficulties, and relaxing eligibility criteria.
Modern broker platforms provide accelerated solutions, completing bot setup within minutes and offering pre-purchase trial testing options. These tools can facilitate high-volume transactions and provide non-biased AI insights for brokers and traders to gain an edge. The intuitive platforms also allow customers access to multiple trading options.
- Empower Independent Brokerage with Customizable White-Label Solutions
To support independent brokerage, PayBito offers retail entrepreneurs the opportunity to create their own brands with white-label products. These solutions provide a self-branded exchange with multiple customization options and features, giving entrepreneurs the freedom to build their own brokerage enterprise. Broker platforms can also offer similar white-label solutions to empower aspiring brokerage entrepreneurs and firms, providing free trials, customization, and self-branding capabilities.
- Utilize AI to Ensure Real-time Data Integrity
AI-powered broker platforms can detect and prevent insider trading in real time, improving regulatory supervision and transparency for all participants. Modern exchange broker platforms utilize data engine tools that analyze anonymous transactions, provide rankings, and relays buy/sell signals.
- Upgrading with AI and Algorithmic Trading Features
Modern broker platforms offer algorithmic trading for all traders, allowing them to use pre-built or customized trading bots with adaptive algorithms. The PayBito platform, for example, offers a quick bot set-up, with no downloads required, and a demo-testing option before investing, providing traders with access to advanced trading strategies.
Trading with a Cause: Brokering World Hunger Away:
The Brokering World Hunger Away initiative is encouraging its associates to donate a portion of their commission to feed undernourished children worldwide, establishing equal opportunity, and fostering economic stability. This approach is sustainable as it does not reduce the brokers' earnings.
Final Thoughts:
The financial industry needs to address the issue of unequal access to advanced AI-powered trading tools and brokerage services. Legacy broker models, such as institutional brokerage, limit financial inclusion and access to AI-powered trading tools for non-institutional traders. The limitations, including the lack of cloud-based solutions and obstacles to financial inclusion, can hinder its growth and competitiveness. To remain competitive, exchanges must embrace innovation and inclusivity.
About Raj Chowdhury:
Raj Chowdhury is the Managing Director of HashCash Consultants and Paybito. Raj pioneered the first interbank Trade Finance and Remittance implementation of Blockchain Technology between two of the largest global banks. Raj is an eminent voice in the Blockchain and Cryptocurrency space and actively engages with policymakers in this area. He is a contributor to Economic Times, Business World, CNNMoney and advises industry leaders in the adoption of Blockchain. He is a member of Asha Silicon Valley, a nonprofit committed to education for children in emerging countries. Author of the book 'The Dark Secret of the Silicon Valley', Raj is an investor in blockchain and cryptocurrency companies and an active member of the philanthropic community.
Media Contact
Coleen Facete, Hashcash Digest, +14159662907, [email protected]
SOURCE PayBito
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