Small brokers should punch above their weight!

5 reasons smaller brokers can compete with the top tier by creating a real time personalised financial experience for their customers that outmatches the current platform and app user experience.

AI/ML is becoming a commodity

The technology barrier of entry for Machine Learning has dropped significantly in the last 12 months. The major platforms, open source code/project and Machine Learning operations (ML Ops) that are now available to everyone with relative affordability means any brokerage IT or Data team can begin to develop the models and capabilities needed to create a real time personalised and generative financial experience for their customers. Hundred of open source models are available through major platforms such a AWS Sagemaker or AutoML from Google.

Quality public financial content available on API

There are many services available to provide real time financially relevant public web content that is enriched with entity information and sentiment. A broker can create a very functional news service that can be personalised for each customer and even used as the basis for generative AI news service. Whilst Twitter has currently made API access very expensive I expect this to settle down over time.

In essence the technical moat much of the top tier financial brokers enjoy has eroded. Smaller, more product minded innovators can take market share by rapidly developing financial experiences that are rich in curated, generated and authored content, highly personalised and automated for financial market engagement at scale.

Generative AI availability

Generative AI has exploded recently because Open AI put a UI on its GPT model 3 and everyone was able to actually experience a Large Language Model - but Generative AI has been around for a while and many cheaper options that may be better suited to your project than OpenAI service re available - for example AWS has just released its suite with AWS Bedrock. Designing a market aware chatbot capable of execution isn’t some dark arts blackbox anymore - the tool are there if you have the product vision. There are more open source projects and courses on these capabilities than anything if ever seen!

Data Science Outsourcing

Data Science capabilities have also been typically little understood or prohibitive for smaller brokers, however a blended service model makes this capability more attainable with good quality outsourcing for building models, or knowledge graphs or creating MLOps within an organisation - if you have good IT and Data leadership this specialist skill can be outsourced or scaled well with off or near shore service models at reduced cost to onshore or permanent resource.

Agility & Size

Given the above reasons the biggest advantage smaller brokers have in size, complexity and nimbleness. An innovation mindset is much easier in a smaller less complex organisation because you can ship and test new financial experiences in quicker cycles than the big boys. Take advantage of it and use your size to your advantage.

PS: Conversational Trading & Post App World

Off platform conversational execution and monitoring just got a whole lot easier with Large Language Models too. This will mean that huge, complex trading platforms will make way for super lean execution within chat and even the playing field further. A decent back end and in-chat trading, education and personalised news and analysis will reduce the overheads of a complex feature rich trading platform.

We know that the growth markets in leveraged trading want a simplified, personalied experience - smaller brokers now have the foundations and capabilities available to create a financial experience that caters to those sectors. Let’s get punching.

Cheers

Adam