How FX businesses can use data to boost customer loyalty and profitability

Digital transformation in the FX industry has changed how customers use FX services and execute trades. FX firms are moving their services online so customers can access them on a self-service basis. While this is efficient and convenient in many ways, having less direct contact with customers can also have a downside—like a gap in data analytics.

Talking to customers and seeing their pricing responses is a good source of information for making data-driven decisions. The insights you glean from customers can help you make workflows more efficient, stay competitive in a complex market, and maintain the personal touch that customers generally value.

The 2022 FX Workspace Survey showed that data-related issues are a universal concern among FX market participants. With less direct customer contact, your firm needs to find new sources for high-quality insights. This data is vital at every step throughout the entire trading workflow.

• Pre-trade: You must understand volume flow and know the liquidity of the market.
• During trades: Feeding data into execution algorithms can improve trading decisions.
• Post-trade: Execution analysis enables firms to assess the quality of their execution and make informed adjustments as needed.

Fortunately, digitalization makes it easy to capture data. If you know how to use it, this data can help you analyze your customers, understand their behavior, and predict what they’ll do in the future. Capturing and properly using this data can help you drive business decisions that increase profitability. Plus, the consistency and reliability of digital data make this a highly effective tool for boosting customer loyalty.

For instance, if you know what a customer is likely to do or want, it enables faster execution on your end. This means that accurate, real-time data benefits not only firms and their customers, but the entire FX market.

What can you do with data?

Access to customer data analytics opens up many options for action plans, but you need a focused and deliberate approach to take full advantage. Your data and metrics must:

• Align with your marketing strategies.
• Be focused on your key objectives.
• Support accurate, in-depth, real-time analytics.
• Allow you to measure success.
• Be accessible to your team how and when they need it.

The industry is changing rapidly as technology advances. FX trading today is vastly different than it was just five to ten years ago. It used to be that brokers had to wait to see a report at the end of the day, week, or month in order to see customer activity. Now, they can access that information in real time, allowing a more proactive approach to trading and the overall customer experience.

Additionally, your data is only as good as your team’s ability to interpret it. Your team might need training to learn how to use data intelligently and make the best possible decisions. After all, data derived from machine learning and AI techniques is best when paired with human insight. It’s the combination of building customer relationships and utilizing actionable insights that leads to the most success, both in acquiring new customers and in customer retention.

Aggregating data points across pre- and post-trade activities helps ensure that your data supports your strategy. For example, say you want to improve your RFQ hit ratios. You need to understand RFQ trends concerning a range of factors such as spreads, currency, product, execution channel, and customer segment.

Often, your FX platforms are already gathering the information you need. The challenge is consolidating, translating, visualizing, and implementing it. Having accurate, real-time data can show you:

• Which customers are transacting less frequently.
• How quickly your team is responding to leads.
• If leads are slipping through the cracks in the sales funnel.
• And much more.

You can use this type of data to make positive adjustments that can improve profitability. Additionally, the right data can show you the origins of a success so you can replicate it in the future, such as metrics on a lead generation campaign.

Ready access to insightful analytics can help your team build data-driven decisions into daily processes, which helps ensure that your products and services are tuned to capture business and improve your bottom line.

ION’s portfolio of software solutions helps you automate and simplify forex trading, along with other daily operations and risk management. You get a complete view of your business and advanced analytics in real time – so you can set realistic KPIs and make better, faster decisions.