Forex CRM Lifehack: Real Cases “HACKER ATTACK”
In the previous article, we wrote that UpTrader Forex CRM has a useful system for controlling fund deposit and withdrawal. In short, it allows you to flexibly configure the approval settings for withdrawal requests though a variety of parameters. The system lets you control the requested amount, the departments that approve the withdrawal, which managers are allowed to approve the requests, whether account details are mandatory, whether or not the CEO approves the requests and many more. All these settings are extremely useful and allow the broker to protect themselves from many unpleasant situations. Only a few of our clients take advantage of these features, while they are available in UpTrader Forex CRM completely free of charge. We highly recommend using them! As an illustration, we would like to share with you a recent case from one of our clients’ operations. Thanks to a well-configured withdrawal control system, the broker team noticed that something was wrong, quickly reacted to an unusual situation, and prevented a large-scale case of fraud.
The company asked us to change the names of the client and the manager and not to mention their own name, but allowed us to tell their story in detail.
John is a professional trader who regularly withdraws profits from Company X. That is why no one was surprised when he sent another request to withdraw his profit for the previous month. The finance department was ready to approve it, but the withdrawal control system was set in a way that all large requests over $10,000 must also be approved by the client's personal manager.
When Casper, John's personal manager, contacted him, he immediately suspected that something was wrong. John's voice sounded unusual. Casper always builds relationships with each client, so he started the conversation with small talk and asked how John's children were doing. John replied that everything was okay and that they were at school. But Casper knew perfectly well that John's youngest child was born only a few months ago, which meant that he was talking to somebody else!
A few days later, it turned out that the hackers were able to create a duplicate of John's SIM card and used it to hack into his account. Thanks to the fact that his broker used the UpTrader withdrawal control system, John was able to keep his monthly profit, and the company prevented reputation losses. It allowed the company to maintain a trusting relationship with their clients and to ensure the safety of their funds.
"The Planet of Vogons"
In this user case, we will talk about a medium-sized Ukrainian broker who has been working in forex for many years, has an extensive departmental network and a complex withdrawal control system. Before adopting the UpTrader withdrawal control system, the company processes were barely automated.
The broker N started working on the Ukrainian market many years ago. At that time, the broker only had clients from Ukraine and the CIS. The withdrawal approval was coordinated by two people: the dealer and the CFO. The process was manual but smooth and fast. Then the broker began to grow, got foreign clients, then foreign partners, and launched several types of affiliate programs.
Each affiliate program has its own conditions for the accrual and payment of affiliate fees. In some cases, additional conditions can exist for different partners within the same program. The broker also allocates bonuses for the deposits. It means, for instance, that if a client came to the broker through a Vietnamese partner who works for the lots, and deposited 5,000 dollars to the account, they get a bonus: + 100% of the deposit for 1,000 dollars. According to the terms of the bonus, for every 100,000 units of currency traded, they kept $3 for themselves. The broker then must pay the bonus for this client to the partner without taking into account the bonus funds and the funds received from the bonus trading, remove excess lots and draw up the balance. Imagine then that such a client requests a withdrawal.
All the numbers were compiled manually. As a result, 6 departments, the secretary and the CEO of the company were engaged in approving requests for the broker. First, the withdrawal had to be approved by the client’s personal manager to make sure that the request was not a scam. Then the request fell in the partner relations department’s lap, because they needed to make sure that extra lots did not get into partner payments. Then, in some cases, they had to contact the dealer to make sure that everything was traded according to the rules. Next, the application went to the compliance department, which may find that the client has not fully completed KYC and that they need to finish the process (the client corrects errors and resubmits the request, and it follows along the same path). Then the application went to the finance department, which once again verified the numbers. And finally, the secretary manually collected problematic requests and took them to the CEO for final approval.
Thus, one request could take 5 days, 10 days, or two weeks to get approved. Needless to say, everyone was tired of it. Not only did this situation take up a lot of time and resources, it still did not prevent the company from making mistakes. Ultimately, the broker adopted the UpTrader withdrawal control system. It helped automate calculations, divide clients into groups, set conditions for calculating an affiliate program for different groups, and automate some of the withdrawals that do not require additional attention. A system of quick notifications pinging the team about new requests was set up, and the request statuses became visible in the CRM.
Now even the most complex requests take 1-2 days to approve. At the same time, the number of errors in calculations decreased significantly. As an additional bonus, the broker was able to take a closer look at the terms of affiliate programs and, in some cases, it became obvious that it was extremely unprofitable for them to continue working under the conditions they previously set themselves. The broker removed all unprofitable programs, freed up a lot of resources, and significantly increased their income from affiliate programs.
Launch market analytics feed in your Forex CRM
Which extra services do you offer your clients? If you think that a trading terminal, fast fund withdrawal, and copy trading services are enough to keep your clients loyal and satisfied, then you may not know your clients very well or have never tried to offer them something else.
One of the UpTrader brokers broadcasts a daily stock market analytics feed and technical analysis to its clients right in their personal account. Its CEO kindly allowed us to analyse their data for 2021. We considered two client groups: those who read analytics and those who do not. The results speak for themselves.
In 2021, customers who read analytics deposited on average 15% more per customer compared to those who did not use this tool. The median bill was 25% higher. At the same time, their trading volume increased by 230%!
Do you want the same results? Easy-peasy!
Daily up-to-date market analysis available in the trader’s room might increase the trading volumes of your company, resulting in more potential profit. This tool is already integrated into the UpTrader Forex CRM, however, only a few of our clients use it for additional sales.
Every day, market experts collect information, prepare materials, and publish technical and fundamental market analysis used by thousands of traders around the world.
This tool is already available to you in UpTrader Forex CRM. To begin broadcasting the feed, contact our support team, and you will gain access to an excellent tool for increasing sales and loyalty of your customers starting tomorrow.
Withdrawing funds from trading accounts is a very important part of business, because there are plenty of underlying issues that can cause serious reputational consequences for a broker and stress for clients. Fraud, stop-outs, withdrawal requests for a bigger amount than available equity, mismatch of payment details, problems with payment systems, KYC/AML non-compliance and a lot of other problems.
To avoid these problems and make withdrawals without risks for a broker and fast for a client, it is better to follow a certain procedure, where every step is under control of your departments. Your Forex CRM must have flexible settings of an approval withdrawal system.
The UpTrader team has developed a flexible withdrawal approval system that is integrated in UpTrader Forex CRM. For example, you can set it up so that your CEO will be making final approval of withdrawal requests of certain big amounts. You can set up this rule for all requests or only for those that are already approved by lower-ranking staff. It’s up to you. It is very important to verify your client with a KYC check, confirm payment details, to do this just direct all requests through a Compliance department. In some cases you might need requests approved by a phone call, so that you are sure that requests are submitted by a real client, not a scammer, so you can set up obligatory manager calls.
All these settings can be easily added in UpTrader Forex CRM.
UpTrader Forex CRM has the following settings you can use:
1. Approval depending on request amount
Withdrawal control is a standard and necessary procedure for financial broker security, but this doesn't have to prevent traders from withdrawing and depositing money quickly. For example, you can allow to withdraw all requests under $100 without additional checks. It means any withdrawal under $100 will occur automatically, but in a case you want to manually approve any amount, you can do it.
2. Know your client system in your Forex CRM.
Establish a rule that requests of any amount are directed to a Compliance department to complete KYC procedures.
3. A withdrawal amount is larger than the client’s deposit
If you hedge risks and use a hybrid model and a bridge, you probably need to control trading activity especially in an important market news period to control financial risk.
If you have special needs related to withdrawal approval procedures, write to [email protected] and we will see what we can do for you.
Every new player in the brokerage business inevitably faces the need to obtain a license, since Forex trading comes with special regulations. No need for panic: the process of applying for and obtaining a Forex license is not as scary as it might seem at first glance. Where to begin with getting a license, how to choose a suitable jurisdiction and how much it will cost you — let’s find out right now.
Forex is a very competitive and demanding industry. The right choice of jurisdiction for obtaining a license is one of the key factors that will determine the success of your company, so it must be approached very carefully. Before settling upon a particular region, you need to see which jurisdictions offer the best conditions for doing business, as well as consider the psychology of your future clients.
First thing to remember is that there is no simple path that will magically lead you to become a licensed broker. Legal and regulatory responsibility requires doing a lot of paperwork and signing agreements, but the payback is definitely worth it.
If you want to make your life easier, we are ready to help you with the most common challenges, such as registering a business and choosing a jurisdiction. Depending on the countries you plan to work in, what financial risks you are willing to bear, and what type of broker you want to launch, we will choose the regulator that will not be a hindrance to your operation. UpTrader provides a full range of legal services both as a standalone package, and as part of White Label Meta Trader 4 and Meta Trader 5 offerings.
There are 2 main options: offshore or European licensing. Let's take a closer look at both of them.
Offshore licensing are the most common and simplest option in the business. It is popular due to its low cost and fast registration. On average, obtaining an offshore license will cost you $20,000 and will take about 2.5–3 months. Among other benefits, doing business in an offshore jurisdiction allows optimizing the tax burden.
The main advantages of having offshore companies:
support of foreign businessmen at all levels
All these advantages provide good business opportunities. You will protect your company not only from liquidation attempts, but also against illegal claims.
Unfortunately, not everything is so simple. There are drawbacks to registering an offshore company. For example, the restrictions on the part of many countries. Some states, such as the USA and EU countties, put companies that are registered in such regions under more thorough scrutiny, which will slow down your ability to fulfill financial obligations.
Here are the most convenient zones for doing business related to financial services:
1. Belize is an offshore zone with a stable economy and financia sector, which is advantageous for registering a foreign company, including the brokerage niche.
2. Vanuatu is a great place to start a Forex company due to its simple requirements and tax incentives.
3. The British Virgin Islands (BVI), Mauritius, and the Bahamas are popular because of the low taxes, which also applies to licensed activities.
4. Saint Vincent and the Grenadines (SVG) is one of the most confidential business jurisdictions.
A European financial license for your business will undoubtedly ensure a solid reputation and credibility. Clearly, it won’t be cheap (at least $50,000 for the registration), you still have to deposit funds into a bank account for your company's authorized capital. Registration of a company and obtaining a license will take about a year. In European jurisdictions, there are strict accounting and reporting regulations, as well as a local office is also a requirement. Among the Western jurisdictions, New Zealand and Cyprus are the most favorable in terms of taxation, the cost of setting up a company and registration in general. The cost of a license here starts from about $35,000.
As we have already mentioned, when choosing a jurisdiction, it is very important to take into account the region your company’s activities will be focused on, as well as how important it is for potential clients to deal specifically with the European jurisdiction. The key is to determine in which bank you would like to open an account for your company. The reputation of the bank is in direct ratio totrust of your future clients . For example, it is almost impossible to open an account in a prestigious European bank for a company registered in Belize.
Criteria for choosing a jurisdiction
We have already considered the distinctive features and differences of obtaining licenses in offshore and European jurisdictions. Here is some practical advice on choosing the right jurisdiction for your business.
1. First of all, pay attention to the registration costs. In some countries, the registration process is quite simple and doesn’t take much time, therefore registration fees and requirements are low.
2. The second point to pay attention to is the conditions of obtaining a brokerage license. The cost of such a license can be quite high, and the time it takes to obtain it varies from a couple of weeks to a year. In some offshore jurisdictions, the activity of Forex brokers isn’t legally regulated, so brokers must make an important decision for themselves whether to do business in countries with a weak legal field, given that this may be negatively perceived by partners, investors, clients, and banks.
3. Political stability in the country also plays an important role. You need to make sure that your chosen zone has a strong legal system, transparent economic policies, and a stable currency without restrictions on investment repatriation. Business processes can be influenced by various political factors, for example, the risk of a new government coming to power and tax relief due to international political pressure.
4. Don’t forget about the peculiarities of the tax regime. Some offshore jurisdictions have lower tax rates, and there are also zones with zero taxation status. However, tax exemption is not always the deciding factor.
Finally, we should mention the meaning of the blacklist. This list is regularly updated by the Financial Action Task Force on Money Laundering (FATF). It includes a list of jurisdictions that are not considered for cooperation in the global fight against money laundering and terrorist financing.
How to work without license in 2021? Get some hacks here
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