White label partnerships work because the market is hungry for FX. Complementary skill sets exist in the industry such that the proper alignment of local marketplace strengths with liquidity and technology capabilities benefit all concerned. Revenues are shared. Start-up costs are minimal. Local providers gain rapid acceleration into online trading while larger providers gain local distribution which is inherently designed for in their scalable platforms.

Imagine a B-School case study in which key players in a dynamic industry needed to choose between direct competition by fleshing out the technical requirements, back office and risk management tools needed for success or combining strengths and competencies among themselves to accelerate the provision of product to market. Imagine a scenario in which cooperation proved rewarding to all participants. Imagine an industry in which the alignment of strengths and weakness can create a more powerful and lucrative business model for almost all participants.

The online capital markets industry is coming of age. Dominant banks and market makers are nestling with smaller retail brokerage firms and distributors. Elite, niche technology wizards are aligning their applications and trading tools with the behemoths of the financial service world. The word that once quickened the heart rate of so many of the barons of capital markets in the past, transparency, has evolved into a term near and dear to the industrys commercial soul.

Transparency suggests efficient and faster routing of information, of pricing, and of delivery. It suggests clear view-through, which in turn, suggests a more egalitarian and accessible industry. With the escalation of cooperation among participants in the FX industry, the online capital markets industry is reinventing itself in time with the pulse of the FX consumer. After all, who wouldnt want to trade currencies or derivatives on a real-time basis with narrow spreads, based on streaming news and data from the markets? The Rebirth of an Industry We have entered an era where the challenge is speed to market. How can more and more retail providers, banks, brokerage firms, licensed financial intermediaries, bring their clients the value and advantages of online trading in FX, CFDs, Futures and Options? The answer is played loudly and clearly each day: cooperation and complementary alignment of strengths, rather than competition and self-sufficiencies. This is the commercial organism known as the white labeling partnership. By working together rather than against one another, businesses in similar industries with unopposed competencies or ranged along complementary stages in the value chain, can and will generate revenue, income and success. For years, the traditional business thinking involved a set of zero-sum definitions in which competitors challenged one another for a finite set of rewards. Thats changing, and changing quickly.

More and more businesses see the advantages inherent in combining capabilities to meet the demands of a dynamic and growing marketplace. In our industry, a number of naturally congruent capabilities cry out for combination. And when they are engaged properly, the commercial consequences are far-reaching. Applied data delivery technology and currency dealing are two that have been brought together through the agency of a number of forward-looking firms including Bloomberg and Reuters. Businesses that specialize in the routing and parsing of data should combine with businesses whose forte is the application of that data. In other words, the birth of online trading has been the evolution of cooperation.

White Label Means...
...working with a complementary business to serve your clients efficiently. The most common and effective white labeling relationship we witness involves a local providers branding a silent partners system with his own name and bringing that product out to his local market place. In basic terms, white label partnerships involve wrapping ones local brand around a proven system that can deliver the products, services and account management and credible risk management tools you require.

the birth of online trading has been the evolution of cooperation

Its this marriage of local marketplace knowledge and world-class technical applications that has most powerfully delivered capital markets online to a wider and broader world marketplace. Twenty years ago, discount brokerage revolutionized the idea of access to the markets. Ten years ago, the internet began displacing the traditional advice industry by creating a global forum for research, data and execution.

Today, the internet and the continuous routing of data and information have transformed the FX market. For a local bank or brokerage firm with loyal, knowledge-seeking clients, the opportunity to trade FX, CFDs or other derivatives such as futures, online, is a natural. In a matter of weeks, a white labeling partner can extend its product line significantly. Clients gain access to a world of dynamic information and trading strategies.

Success is For Those Who Focus
What is needed to be successful in online FX through a white label partnership? We would posit that the most significant ante in the game is a sufficient commitment from executive management. Without top-down endorsement and focus, the program can lie fallow. The winners are those organizations that believe online FX is going to play a significant role in client engagement, revenue expectations and service promise.

The second criterion for success is an empowered and exclusively dedicated management group charged with implementing serious and well-coordinated business. This may be a professional from the FX desk; it may be a marketing or sales executive with a passion for building a new business. The dynamics of the industry suggest that client management and service are most critical.

The third requirement is to fully partner with your provider. Harness the experience of the partner. Their knowledge and expertise in real-time pricing through aggregated, best bid/best ask liquidity, risk management tools, account management and full set up and technical support should be your key to success.

The fourth dimension is a true focus on building client relationships. While your local distribution is invaluable, your future base of online traders in FX is not necessarily contained in your current mix of clients. It requires aggressive testing and monitoring of the online media space to build a client base. For most platforms, the critical paths lead to the download function: prospects must download the trading platform if they are to experience the value and benefits of FX trading.

The Nature of the Beast
What may challenge many new white label participants is the fact of the Internet itself. Online FX trading means online behavior. Unlike the 9 am to 4 pm bricks and mortar service regimen, the online trading platform is a 24/5 environment. When the markets are open, so is the white label platform. The challenge is to accept that the online trader is self-selective. He or she is browsing the Internet on their own time, at their own speed, seeking solutions that meet their needs. Clearly, the best platform is the one that combines multiple product opportunities, competitive pricing and instant confirmations supported by a rigorous and accurate back office environment.

The Benefits and the Outlook
Combining capabilities works. White labeling speaks volumes about the reasonableness of online capital markets business planning. The white label partners share revenues, according to clearly defined pricing grids. Complementary rather than competitive, the retail market is just emerging as a source of new business