Plus500’s Chief Growth Officer Dani Magner has said that the broker’s growth in the US has come from channels that the broker did not anticipate when it planned its entry to the market.
Speaking at an event put on by tech company GBG, Magner discussed how Plus500 thinks about expanding into new markets.
“Research is key [to expanding into new markets],” Magner noted. “Are you the first mover to the market or the second mover or beyond that? If there is a viable business and there is money to be made then it makes things easier. You join, you see what the others are doing, you copy and you improve on what they are doing.
“Plus500 was a pioneer in some operational areas but we did not invent online trading. Plus500 came into this field in 2009 to say that we see a product that makes money and we can do it better. So that’s the first option, you go to a new jurisdiction and see if your competitors are making money. And if they are not, you have to ask yourself why. Because there is a huge opportunity to be the first mover but also a huge risk.”
Building on that point, Magner said that the firm had originally entered the US futures market to be a purely retail business. However, after acquiring Cunningham Commodities in 2021, the firm realised that it could also expand into the introducing broker and wider institutional business.
“We entered the US market to expand into the retail business, which is Plus500’s forte and always has been,” he said. “But along the way we found out that there is a huge opportunity in the futures B2B business, you have farmers that need to hedge their crops, or actual large traders that want to trade futures.”
Magner noted that this business line has been key in growing US deposits from around $40m when Plus500 acquired Cunningham to over $1bn today.
Japan tough, Australia easier
Although he did not go into great detail, a couple of other points that Magner discussed were also noteworthy.
The Plus500 CGO said that the firm had seen an opportunity to reduce rejection rates and lower costs on KYC in Australia. The broker partnered with GBG to achieve that and said that the solution had worked as planned.
Magner also said that Japan has proven to be a tougher market for Plus500 and other brokers, due to the country’s tighter restrictions on digital ID verifications.
“Digital verification requirements in Japan are very difficult, both for international companies and also for the customers,” said Magner. “So one solution to do that is actually to do things manually, to go directly to the client.”
