Brokerage as a Service

Brokerage as a Service: How Fintech Partnerships Can Help Banks Unlock Retail Trading Opportunities


  1. State of capital market
  2. What Retail Investors Need in 2022?
  3. Fintech Collaborations to the Rescue
  4. Brokerage as a Service by X Open Hub
  5. Ready to Unlock Opportunities?

State of capital market

Despite the persisting market volatility and huge stock market sell-offs, retail investor numbers have continued to grow even in 2022. Driven by concerns regarding rising inflation, a potential global recession and supply-chain disruptions, investors are looking to secure their financial future in vehicles that offer higher returns than bank accounts. In fact, two-thirds of American investors held on to their investments through the worst turbulence in the stock market, according to an eToro survey in July 2022.

Reuters went so far as to state, ‟Individual investors are buying stocks at a pace akin to the 2021 meme-stock frenzy even as the returns on retail investments sit at multi-year lows amid a widespread sell-off on concerns about rising interest rates.” Retail investors had bought stocks worth a whopping $76 billion in the 3 months to May 24, 2022, as compared to total stock purchases of $80.6 billion between January and March 2021, at the peak of the meme stock frenzy.

What Retail Investors Need in 2022?

It is quite apparent that this is the era of the retail investor, who has awoken to long-term financial planning. However, on the flip side, there is still a large percentage of people who have chosen not to participate in the financial markets. Many say this is due to a knowledge gap, with 75% of existing retail investors and 70% of yet-to-invest individuals stating that they would invest more if they had access to more learning opportunities.


So, what retail investors now need is a capital market ecosystem that addresses their need for easy access to investment opportunities and educational resources to support informed investing. Banks, with their relationships and infrastructure to support existing and prospective investors, are best positioned to capitalise on this need. If they do, they just might help beat the prediction that the online trading platform market size will grow from $8.9 billion in 2021 to $18.4 billion in 2031, at a CAGR of 7.8%.

There is a huge opportunity here that banks worldwide are recognising. The only obstacle might be access to a technology infrastructure that allows them to seamlessly provide new investment opportunities to clients without needing to tie up vast resources in setting up a separate brokerage department.

Fintech Collaborations to the Rescue

The world’s financial markets are at an inflection point, where the retail investor is playing a much larger role than ever in defining the ecosystem. The time for the financial industry to address this evolution is now. But that will need collaboration. Banks, which are already in close proximity to investors, are well positioned to act now and drive the change in their favour.

However, the need of the hour is to move with agility. So, rather than reinventing the wheel, collaborations with fintech can help banks rapidly enhance their product offerings. Plus, this will enable them to offer the latest technology solutions to today’s digital-native customer. Collaborating with fintech will allow banks to offer solutions for smarter and faster trading, along with better customer experiences. This could directly enhance revenues from the new line of business.

Fintech is better positioned than large legacy banks to respond quickly to changing market needs. In addition, they can innovate quickly and reduce time to market, giving their partners an edge in attracting and retaining new investors.

Brokerage as a Service by X Open Hub

At X Open Hub, we pride ourselves on our speed of innovation, creating tailor-made solutions that banks can effortlessly plug into their existing system to enhance their offerings. Brokerage-as-a-Service (BaaS) is a white-label solution for investment in funds, stocks, bonds, forex and other financial instruments.

In the brokerage white label model, a trading technology partner provides the entire IT infrastructure, allowing banks to use client portals and connect their own back-end to front-end modules through APIs.

Our BaaS model offers multiple benefits to ease the offering of brokerage services.

  • The solution is readily integrated and instantly scalable, leveraging cloud-based infrastructure (located in the biggest recognisable data centres via Equinix) to achieve sub-millisecond latency and 100% uptime.
  • We handle all back-office activities, such as reconciliation and reporting, so that you don’t have to.
  • We also provide front-end services, such as apps and a web portal to trade, along with the back-end system, easing the creation of new client IDs, execution of deposits and withdrawals, tracking of clients’ live trading activity and viewing overall portfolio performances.

With X Open Hub, you also gain access to deep institutional liquidity for 5,000+ global instruments, including forex, indices, commodities, shares, ETFs and cryptos. Plus, since we only operate on a business-to-business basis and do not compete for the end consumer, you may establish your branded apps and keep your client data (name, email, telephone number, etc.) securely in your CRM or another external database. We will know no more than an account ID.

Ready to Unlock Opportunities?

X Open Hub is an institutional division of an internationally regulated European business (XTB SA) with a significant global footprint. We offer multi-asset execution, prime brokerage services and technology to numerous banks and brokers worldwide. Our wide experience gives us deep insights into institutional needs, while our tech focus allows us to ensure agile innovation, so that you can capitalise on market opportunities.

Talk to us to learn more about our Brokerage-as-a-Service.

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