Boston Technologies has set its sights on home ground by announcing the opening of an office in New York on Wednesday last week – CEO George Popescu elaborates
The company’s New York operations is situated within close proximity to the New York Public Library and Bryant Park, ensuring a prominent location in the New York City borough of downtown Manhattan.
According to Boston Technologies, the ethos behind the establishment of an office in Manhattan was driven by an increasing demand for its solutions which include a back-office suite, bridge technology which enables brokers to connect with third party services and Boston Technologies’ in-house products.
LeapRate today discussed the rationale behind Boston Technologies’ prominence among the financial conglomerates of New York, a conversation which the company’s CEO George Popsecu began by explaining the intended target audience: “The target audience is of course institutional FX customers” Mr. Popescu elaborated.
“As you may know retail FX in the US is dead and companies like FXCM or GAIN Capital who rely on them are paying the costs. Look at their stock price. Their stock and valuation is what it is because many years ago instead of uniting to help bring a reasonable regulation to retail FX in the US, they all back stabbed each other. Now they are all going the way of the dinosaurs” he continued.
In ascertaining the reason why New York was chosen as a further location in North America in addition to its existing and well-established operations in Massachusetts, Mr. Popsecu explained to LeapRate that this was a strategic decision “because most of the financial markets in the US and the world is still focused on New York.”
He continued “It is less dominating than it was before 2008, and New York is slowly going down in terms of world financial market share, but it still dominates and it is very easy and convenient for us. While Boston Technologies is in the US , we haven’t really taken any advantage of it and we intend to do so now.”
Boston Technologies takes a somewhat direct view relating to the immediate future for retail FX firms in the US which are currently in operation despite huge capital requirements yet strong volumes. When asked by LeapRate what the potential for domestic market companies is, he stated categorically “Absolutely none. If one had $30 million USD ( lets say , including capital haircuts) you can get risk free 4% interest rate by buying corporate or municipal bonds.”
“However as a retail FX firm in the US, to make $3 million per year profit, you have to take risk due to the spread competition, and that’s only 10%.”
“So why take so much risk, risk of failure, market risk by running a desk, and all the risks inherent to a new business or associated with very competitive businesses , to make 10%, when you can make 4% with much less risk or use the $30 million in another way in another business. So I think the US retail FX market is dead, or will be soon, and the exchange(s) won the fight. Lets stop losing our time and do something else, there are plenty of opportunities out there” is Mr. Popescu’s conclusion.