Retail FX broker liquidity: a conversation with iS Prime’s Barry Flanigan

Barry Flanigan

7th July 2022

FNG Exclusive Interview… The topics of liquidity, risk management, and using the right technology – and doing them all in concert – are ones that are increasingly on the minds of senior management at FX and CFD brokers, especially as markets (and clients) continue to be unpredictable and choppy.

FNG is pleased to speak today with Barry Flanigan, Head of Distribution and Liquidity at iS Prime, about the importance of being a “one stop shop” for liquidity, technology, and risk services. And, what it means to be part of the greater iSAM Capital Markets Group and what that means for clients.

FNG: Hi Barry, and thanks for joining us today. How does iS Prime benefit from having an $8 billion hedge fund manager as a major shareholder?

Barry: One of the biggest benefits for our clients is our technology. We use the same core technology for our clients as iSAM, an $8 billion CTA hedge fund. I don’t think any of our competitors have technology and analytics of the same level of sophistication and this is a real advantage for our clients.

FNG: IS Prime is part of the ISAM Capital Markets Group which also includes IS Prime Hong Kong and iS Risk Analytics (ISRA). How does the group structure benefit clients?

BarryFirstly, across the Group we have multiple products so we can be a one stop shop for clients, offering institutional liquidity, risk services, bridge technology and white labels. As the different entities are combined under the same technology stack, they are built to work together. This makes it simple and seamless for clients to have liquidity from IS Prime in London, Index Swaps from Hong Kong and bridge technology from ISRA. The components all complement each other. By design, they are built to be as efficient and cost effective as possible. We make things as simple and seamless for our clients, too. They can speak to one person and cover all their product needs.

The fact that we have an office in the UK, the US and Hong Kong also means that we offer round the clock servicing. Every coverage person has access to the same technology and all servicing is done by highly skilled and knowledgeable members of our team.

Of course, not every client comes to us for all components – and that is fine, too – some may just want our bridge, our liquidity or our risk services. I firmly believe they are extremely strong in isolation, but there can be significant commercial benefits for clients who use us across multiple products.

FNG: How do clients access services inter-region and out of hours?

Barry: Our service is one of our biggest USPs. Clients can access our 24 hour support group by email, a number of instant messaging (IM) platforms or phone. They can be confident in the fact that they can access the same in-depth knowledge and high quality skills regardless of whether they are speaking to someone in Hong Kong, London or the US. No matter where clients are based, using our follow the sun model, we can provide them with the best possible service, whenever they need it.

FNG: How important is it for clients to have a structure that properly straddles risk and liquidity?

Barry: The most successful retail brokers do things simply and they do things well. They don’t try to do everything themselves but look for reputable partners to supplement their in-house capabilities. We can provide them with the tools that they don’t have in-house and the expertise to help them to optimize their operations and become more profitable.

ISRA’s approach to risk management is systematic and analytical – it’s a proven approach that has been tried and tested across large scale clients. The holistic view of the wider market, which ISRA has, is invaluable. Clients in isolation are just looking at a subset of the market. With ISRA – one of the biggest providers of risk services globally with oversight of  over $1.8 Trillion in monthly notional risk volumes – we have a bird’s eye view and we can provide insight to clients on market trends and how best to react to specific market situations. ISRA can make a huge difference to clients in how best to manage their risk – and this has a significant impact on their P&L.

About 95% of ISRA’s clients use iS Prime’s liquidity. They benefit from the relationships with Tier 1 Liquidity Providers that we have forged across the Group and in-house order flow analytics. They can leverage our buying power because IS Prime’s volumes enable us to negotiate exceptional pricing that may not be possible for them to achieve themselves.

FNG: You work with some of the largest brokers across the globe and there are clear commercial benefits due to the volumes that these brokers are doing. How easy is it for start-up brokers to leverage relationships from across the iSAM Capital Markets Group?

Barry: It’s very easy. In fact, I think it’s the best possible service that you get. We can help them with all their technology and liquidity requirements and can get them up and running very quickly. We can provide advice and help for the initial set up, guide them through the process, provide liquidity, a bridge, optimize their MetaTrader platform or provide an MT4/MT5 White Label. We can also manage their risk. If they come to us for our full service, then we are fully invested in their growth and can fully support them every step of the way.

I really like working with start-ups because you can empower them and give them a head start. All they need to focus on is sales and marketing and account opening. We can get a new broker up and running within a month, assuming KYC and compliance are all approved within that timeframe.

FNG: If clients aren’t using iS Prime and ISRA’s combined services, what are they missing out on?

Barry: I’ve already mentioned the commercial and technology benefits of using the entirety of the iSAM Capital Markets structure. In addition, it’s worth noting that we look at clients holistically across the Group. Because we’re structured under one umbrella we have a full view of a client’s needs and how best we can help them. We always try to see things from the client facing side to make things as easy as possible for them.

 

For more information about iS Prime, please contact us.