Who stole your MT4 clients?
Timur Latypoff, Director of MT4 technologies provider Takeprofit Technology, takes a look at a question many forex brokers ask themselves every once in a while: Is someone stealing my clients (or client data)? What can I do about it and – most importantly – to prevent it?
Takeprofit’s products include A and B-book risk management solutions, the Klondike liquidity bridge, and the Ashira automated dealer anti-cheating defense. Takeprofit’s clients have included Forex brokerages and white-label solution providers such as Darwinex, FXPIG, FXSTAT, BTFX, FinFX.
[divide]
Finding paying clients is what usually makes or breaks a retail Forex brokerage company. So many FX companies consist mostly of a marketing/sales department, because acquiring and retaining customers is the most important (and, probably, the most difficult) thing a broker can do to be profitable.
One of the ways to lose your hard-earned clients is if some dishonest competitor gets access to a whole list of your clients, their names, emails, phone numbers, and payment histories — and targets their advertisement campaign at them directly, by emphasizing your shortcomings and their own advantages, even if untrue.
In this article we will take a look at how MetaTrader-4-based retail brokerages can protect themselves from theft of their clients’ contact details.
Who steals clients, why, and how
Obviously, the end-customer of your clients’ database theft is your competitor. Nobody would mind extending their mailing list with thousands of emails to fresh traders eager to make a live deposit. Every sales department dreams of an opportunity to get a thick list of leads with full names, phone numbers, and valid addresses.
But how could it happen that your full list of clients that you cultivated carefully over the years of honest operations would end up in your rascally competitor’s hands?
Firstly, of course, it could be a server security breach — your website could get hacked, your trading server’s passwords could be guessed. We will not be discussing this possibility in this article, it is a very broad topic well beyond our interest here. To mitigate such risk you should hire competent IT personnel.
Secondly, your employees could leak or sell your clients’ personal data to third parties. They say that if you go to a bar in Limassol on Friday night, USD $1,000 could get you a full clients database from an FX company across the street. If your chief dealer or IT guy think that they are under-compensated, they might have an easy time making up for that difference.
Finally, your technology partners could “borrow” your clients’ information rather easily. If you installed a plugin into your MetaTrader 4 server, or you logged into some third-party tool with your manager’s login and password, it would take less than 10 seconds for an untrustworthy IT vendor to sneak all traders out without leaving any traces. Some technology providers might even launch their own retail Forex brokerage division eventually.
Certainly, there are other, less common possibilities, but for the sake of brevity we will concentrate on the second and the third case above in this article.