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We’re back with a new edition of the C-Suite.
This time we’re talking to Muhammad Rasoul, the CEO of MENA-based broker amana.
Having been more of a regular FX/CFD broker, amana has made some big changes over the last few years to become something like an ‘everything in one’ trading and investing app.
We spoke to Muhammad about that switch and what the broker’s plans are for the future.
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You have been in the industry for a long time. Can you talk about how that ended up happening?
My first job was on a futures desk back in the mid-90s. I was going through something like a rebel phase and realised I needed to start getting a bit more serious.
I applied to an ad in the paper for a job at a discount futures broker. This was voice broking, there was no online platform back then.
I didn’t get the job but they called me back about two weeks later, after initially rejecting me, and asked if I wanted to come in and work for them for one day as a trial. It was three hours and I would get $7.50 an hour.
The manager sat me down, gave me a piece of paper with all the different order types, and said ‘in five minutes, those phones are going to ring and they won’t stop for about two hours. Deal with it.’
I probably made a million mistakes but I was addicted. I actually thought I wouldn’t get called back the next day but I did and it became my life, nothing else mattered. I became obsessed.
A few years after that I ended up being employee number two at GFT, which was originally in a basement in a suburb of Grand Rapids. We went from that to having 10 offices and more than 500 employees.
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You’ve been at amana now for four years. My impression is when you joined, amana was like a classic forex broker and that has changed a lot since. Presumably that was a deliberate move?
Absolutely and that was part of what appealed to me. The owners wanted to not just have a brokerage business with a pure asset value. If you have a MetaTrader business that’s really all you have. The clients are completely transitory so you will really struggle to have anything beyond an asset purchase price as your enterprise value.
For me personally, I did not want to come and pitch to switchers. Like if you are dealing with only MetaTrader clients, you are essentially pitching to a customer who at any moment can switch from you and move to a competitor. So it’s not very sticky business and what I wanted to do was pitch more to active investors and crypto kids.
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And what has that involved?
We have changed everything and one of the main parts has been building an app with a UI that’s very easy for people to interact with.
So if you want to invest in fractional stocks or trade gold, you tap in $100 and you take a position with that $100.
Our default leverage is only 25x, so lower even than ESMA margin. I didn’t want to offer crazy leverage. I figured if we have an environment for active traders, it needs to be one where the risks are clear and traders understand what can happen if you are overleveraged. Naturally one of the first requests we got was for higher leverage, which you can access, but the default level is still 25x.
A lot of people don’t even know when you trade on super high leverage, how much the odds are against you when you are trying to predict short term price movement. They don’t have enough knowledge, you know? I didn’t want any part in that.
We’re also very transparent about leverage and how we make money, regardless of the product. So on stocks we do PFOF, which is not something I feel we need to hide.
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If you look at the broker industry, it seems like a lot of companies are eager to go to MENA because it’s unchartered territory. And that means you can still do pure play ‘trading’, without having to have a big product mix because ‘forex’ and ‘CFDs’ as products are just not as familiar to people in the region. So do you really need to do the investment platform model with CFDs, like many companies now feel like they have to in Europe and the UK? Couldn’t you just be a CFD broker and you’d be fine?
I think that’s a big mistake that a lot of companies make. They assume it’s underbroked in MENA when it’s actually hugely saturated, particularly in the UAE. So having additional products, a different brand, and a different take on marketing is not a bad thing. It’s actually vital because otherwise you’re not differentiating yourself in a highly saturated market.
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Do you think the current market for brokers in Dubai is sustainable? It seems like bubble territory from the outside. Can the good times continue?
No I don’t think the current market is sustainable but the UAE, particularly Dubai, has had these boom and bust cycles in other areas before. I remember coming here in the 2000s for the first time and how the property market went through that.
But I feel that this is going to be a very good place for the fintech industry long-term. I think it’s a good location globally. I think the tax regime is very beneficial for a lot of people from Western countries, whatever that means anymore, to come here and optimise their taxes. I think it’s a good launch place into the global south for businesses. So I don’t see that changing for decades actually, even if there are some ups and downs along the way.
Where is amana’s biggest market today?
The UAE is by far our biggest market. You know, another trait of a lot of brokers is you have this global mentality. You take licenses everywhere and you kind of try to do a lot of things at once.
We did not want to do that. What we wanted to do was focus on the UAE, get to a critical mass here and then start looking at other markets.
So we’ve expanded into Lebanon successfully. Jack Saidy has done an amazing job there. He is an amazing leader and we’re super proud of him.
We’re looking at some other countries in the region and you do pick up a good number of clients organically as well. But we are not rushing into anything and we’re happy with how things are proceeding so far.
Something you hear about MENA is that it is a lot more trust-based than, for example, Europe. So people want to meet in person, they want to see a lot more of your brand. How true is that?
I don’t really agree with that. I think a lot of people may want that to be true because it fits with what they are doing. But if you look globally, people value simplicity and convenience, which is what the amana app provides.
I won’t go into the details but we have leant heavily into digital and performance on the marketing side, which is almost the complete opposite of what a lot of our peers are doing.
We deliberately hired people from outside the industry from places like Google, Amazon, and from ecommerce platforms. I see our acquisition costs and I see the LTV of customers and I can see its working.
Yes there are customers that want higher standards of service and if we see, for example, you’re a golden visa holder here in the UAE, yes there are things we’ll do to make sure you get higher quality service.
But I think the idea that every client wants to meet for coffee, have our sales team look them in the eyes, and do voice broking, is not true. There are some people like that but it’s a very small proportion of the customer base.
So what’s next for amana then?
We’re going to lean into the digital side. We kind of have the FX/CFD and stock trading down. We’re going to add options, probably in Q1 of next year. And then we’re gonna go into really what I see as the future for us, which is this combined trad-fi and digital assets platform, where you’ve got a fiat wallet, a digital wallet, you can switch between the two, you can stake, you can hold, you can send and receive funds and make payments, you can make auto-investment plans. I see having that sort of platform as the future and one that someone can take over when I’m gone.
You’re not that old…?
I mean when I leave the company David.
