CMC Markets plc (LON:CMCX) Global Head of Retail Benjamin Charbonneau caught up with DirectorsTalk to discuss changing retail trading expectations, client-led technology, multi-asset growth opportunities, and the strategic importance of the company’s Bermuda hub.
Q1: What are the main trends that you are seeing across retail trading clients today?
A1: Over the years, what we are noticing on our side is retail clients are becoming much more sophisticated, more global, more multi-asset. They want powerful technology, but they want it simple. They want more education, but they also want it to come with transparency, trust. From what we are seeing on our side is that the real opportunity is really to combine that institutional quality, that institutional branding, that 35-plus years of trust that we have on our side, and combine it in a platform that makes it intuitive and effectively available anywhere that they are in the world.
You can have a client, for example, look at foreign exchange in the morning, trading on macroeconomic news, and then they will kind of drift away into maybe oil or gold, and then they will look at an equity index just before the closing. So, what we are seeing is that people have greater expectations when it comes to platform and technology. They want everything, who doesn’t? Ultimately, they want it all, and they want it simple.
I remember 10 years ago when we were doing platform run-throughs, and I would spend 45 minutes to an hour and a half on one client going through a trading platform because they were quite sophisticated back 10 years ago. Now, what you are seeing is that that same platform has the same functionality, the same, I guess you could say, leading technology in terms of functionality, but it is a lot simpler to use, if that makes sense.
A client coming to a new platform now, if they don’t get it right away, they generally bounce and go to another platform that is able to offer them the same powerful technology, but in a more intuitive manner.
So, I would say that the demand here is absolutely shifting towards powerful technology, but offered simplistically, almost in a minimalist kind of functionality lifestyle. That is how I would describe that.
Q2: How is CMC Markets responding then to those changing client needs?
A2: We’re constantly innovating. I think, as one of the pioneers in the space, again, almost 40 years now, we have always taken what the client wants first and built upon that.
Generally speaking, we haven’t been making tweaks or introducing functionality that is not driven by a client. Most of the time, we’ll listen to the clients and what they say, and say, we release things like TradingView functionality, not only from a trading chart perspective inside our trading platform, but also the actual integration itself with TradingView to be able to actually place trades via TradingView and on our side.
So, that is not our technology. Really, from our perspective, we have made a shift towards, instead of building everything in-house and saying, oh, well, because we could build everything, right? We are a technology company. We build technology for massive businesses everywhere around the world. But again, it is not about building proprietary tech. It is about listening to what the clients want.
Some examples of that are, if a client wants TradingView functionality, because that is one of the better charting platforms in the world, they really invest all of their time and energy in providing some of the best charts. Well, instead of fighting against that trend and seeing something like TradingView as a competitor, we see it as a value-add. So, we consume those charts in our trading platform to give people the best kind of trading experience within the CMC environment, within that institutional trust environment.
Same thing with MetaQuotes trading platforms, whether third-party platforms, and there is a multitude of them out there, clients want what they want.
So, instead of fighting against that, we try to offer a wider breadth of products and functionality and just be driven by what the clients want and ensure that we deliver that in a CMC fashion, which is on time when they need it and, obviously, with a very, very simple and powerful experience on the trading platform.
Q3: Where do you see the biggest opportunities for CMC Markets in retail over the next few years?
A3: That question is probably the biggest question that comes up on a weekly basis with us.
I have been in this particular role for about 18 months, and this role is the Global Head of Retail. What does that really mean from a global CMC perspective when you have got office heads and directors and managing directors in Singapore, Australia, New Zealand, and Dubai has now got a presence and Canada has got a presence?
So, a Global Head of Retail, from our perspective, is really about prioritising the biggest initiatives. We are definitely not short of ideas, if anything, we have got an infinite list of ideas coming from clients, coming from staff, coming from everybody else around the world. You saw the Everton sponsorship, naturally.
So, we are doing things in a big way and there is an absolute need to prioritise the items that make the most sense earlier on and then move on to those, I guess, not necessarily less important, but just less impactful products as we kind of go on through time.
From our perspective, we are not agnostic to prediction markets, proprietary trading, we are watching everything across the entire field of products that are actually coming out. Digital assets over the last five years are something that has become quite mainstream now. So, when we talk about a multi-asset platform, we absolutely include digital assets in there versus, say, 10 years ago, when it was something that really wasn’t on the radar.
Multi-asset platform to us means offering the clients whatever they want and at the time that they do need it, whether it be digital assets, whether it is forex, whether it is commodities, but also the multi-asset side of it isn’t just an asset class within a derivative, but it is an actual asset class outside of that. So, offering cash equities, being able to collateralise products, being able to do more with your money, earn more with your money. That is what we are going with, a general overview, I guess you could say, of where our strategy goes.
Q4: Now, Bermuda is an important part of your role. Why is the Bermuda office strategically relevant for CMC Markets?
A4: A question that comes up often: why did CMC Markets decide to open an offshore entity a few years ago? From our side, it goes back to a conversation we had with the founder when I was Head of Singapore back in the day, and effectively saying that we do really, really well in core markets and CMC, again, a very long time ago, pioneered, or was one of the pioneers of, retail trading, making it accessible to everyone.
That has never really gone away, but what has changed over time is our ability to onboard global clients.
Regulations are unique in every jurisdiction, and what we have noticed is we have, for the better part of a decade, had a massive increase in interest in CMC products. Now, that interest could come from Latin America, could come from Africa, could come from Southeast Asia, and we’ve always had that demand, but it has really, really grown over the last 10 years, consistently every year. That’s without us really doing anything active in those regions.
As a FTSE 250 company, publicly listed company, of course, and 35-plus years of trust, you naturally get all of this organic interest from people wanting to open an account with you. However, we couldn’t in most of those jurisdictions in the past.
The main reason for that is because of a lot of these AML requirements, for example, a basic requirement for opening an account anywhere is to be able to verify a client’s identity. Now, if you use a region like the UK or Australia, it becomes very difficult to verify someone from, say, Mexico or Costa Rica or Brazil or any other market, for that matter. Generally speaking, you need to tap into some of these more technical things, like credit bureaux and electoral roll systems. How do I know that you’re really you?
Now, Bermuda, in short, its regulatory environment is far more progressive in terms of allowing technology to be used to do verification of clients. So, things like liveness tests, when you open something, an account, and you effectively have facial recognition, biometrics, well, it’s open to using that software to be able to validate clients.
So, what we’ve done is simply taken this massive organic demand for our product, and we simply applied for and were then granted, a licence by the Bermuda Monetary Authority that allows us to leverage a tier-one jurisdiction when it comes to regulation and allows us to onboard clients from nearly every corner of the world.
We’ve simply taken demand that was already there, and we’ve created, innovated and launched a new programme that allows us to onboard these clients with the proper governance, and so that’s why the Bermuda hub exists.
Q5: What should clients and investors expect from CMC Markets Retail going forward?
A5: A lot more innovation, a lot more. It’s difficult to do these conversations without actually alluding to anything.
So, in my current position, I can say that CMC, as always, will continue to push the envelope forward, will continue to listen to clients. You can expect big things from CMC in general, as we always have. It’s quite public that our Everton sponsorship was announced, that is an indication of what’s to come for CMC. We’re absolutely not slowing down, our founder is far from slowing down, he’s constantly pushing for new, big initiatives.
That’s all I’ll say for that but it’s a very exciting time for CMC and I don’t think any of us are going anywhere anytime soon. We’re very, very excited for what’s to come.
