There are countless Introducing Brokers working with FX brokerages all around the world at growing rates, despite the internet revolution. The beautiful and authentic thing about IB’s working on a global scale is that they get to preserve their work ethic tactics to a certain extent, unlike affiliates who must conform to the global customs of the online world.
How does this help us understand the culture? Well, you can learn a lot about a country’s culture just by observing the way people do business. Since Partners must report to global financial firms, their culture can stick out like a sore thumb.
To examine each cultures IB presence and attitude we must look at three main factors driving this market.
- What are the market demands
- What is the cultural standard
- What is the popularity of forex in that culture and how it impacts daily business
China has a massive market for forex, the reasons not limited to its vast size. Forex gained popularity in China due to their heavily business orientated culture. However, the market demands in China may be a little more….. demanding than in the rest of the globe and since forex is a global industry; this instantly makes the Chinese market more competitive and desired.
Even though the market for forex is big here, it is relatively new growing only in the last few years. Only the biggest survive here, and this is because their cultural standards are in line with heavy trust building, and trust building in the financial industry is costly. Chinese IB’s are very selective when it comes to working with global brokers for this exact reason. This weight added onto trust implies that IB’s in China operate with countless trips back and forth and will only take you seriously if you take the time to interact with them face to face. After all, there is a lot of money to be made, as in 2015 a record in Zhengzhou estimated around 90,000 lots traded on a monthly basis.
Of course, we should also take into account the kind of popularity forex has in China. Apart from your classic retail trading, in Zhengzhou, the market grew through portfolio management. What does this imply about IB presence in China? The customer base is on an exclusive scale, and the profits to be made are in high volume working in a fully corporate environment.
On this side of the map the industry translates in a more chaotic fashion, retail forex takes over, and everyone gets to have a piece of the pie with representatives fighting over office space all too frequently. Malaysia has undoubtedly become a forex empire which also leaves room for a lot of scams!
In Malaysia, the Introducing Broker is all about financial independence and self-wealth. You can usually find them in groups of people; and most of them use the Pyramid Scheme, only in forex in can be surprisingly successful with a little dedication and a lot of support. Most IB’s in Malaysia do not have a mediator office but rather work peer to peer among their own networks sometimes hosting educational events and other promotional gatherings. It is very important that you know the right people in such structures, as familiarity is usually how trust is identified.
Traders and even IB’s in Malaysia are more attracted to the full retail experience of forex, reaping any source of Bonus offers and minimal deposit amounts. Some have dubbed such clients as ‘bonus hunters’. There has been a true forex revolution in Malaysia and even in Indonesia, with stories rising about gangs working against each other in cases resulting in murder and other casualties.
It is evident that when you turn forex into something resembling a street market as oppose to a sophisticated investment exchange, you will have some dangerous results, ”money is the root of all evil” so they say. However, it’s not all bad; the market demands in countries like Malaysia and Indonesia helped push the boundaries in the industry. Brokers from all walks of life have chosen to cater to these demands and have set new standards for young entrepreneurs and have made forex trading reachable to an even wider audience.
Heading more to the South we may see a repetition in the trust issue pattern also found in the Chinese Market. What makes Indian IB’s exceptionally tricky to work with, is knowledge of their underlying beliefs, values, and assumptions of their culture is something more than expected. Dealing with Indian business people usually requires a level of flexibility, and in most cases, you need to allow them to dominate in some aspects. Small talk about family etc. is encouraged and can really help with building trust. At the same time being involved with family and networking is highly valued. Networking may take you further than you think in this region.
It’s not necessary for Indian IB’s to have localized support as there are many independent working IB’s who have their own networks and prefer to keep it that way. However, they do demand to have special requests met and are the toughest negotiators, so you need to be ready to meet them halfway or give them an offer that is safely fair. In my experience with Indian IB’s, they have a very difficult time trusting you, and this can cause some friction in communication, taking things slow and being clear about the terms of the arrangement is a must. If you head into negotiations with a forceful attitude, you may scare the potential Partner away.
European Business is admittedly swifter in terms of deal closing since the connection can be and is usually pushed to be superficial. Formality and good manners take the front seat and that’s what can make or break a negotiation. To Europeans, it’s not so much who you know but what you know. Of course, Europe is a wide spectrum, and people doing business for the wrong reasons; is a human thing in general, but alas the European does not rely on the safety in your contact list. What matters is skill, can you carry out a Partnership, and do you have the stamina to bring in desired results? In Europe, you will find that a successful meeting is one accompanied by a feast, a celebration of debate, satisfactory cuisine, maybe a little bit of alcohol and insightful laughs.
One time is enough in this case; Europeans don’t flinch at the worry of distrust. Perhaps business people in this region stick to strategic methods of carrying out their company’s responsibilities without allowing any third Party to pose a distinct threat in the first place. If they like you, they like you, but any person in business can turn out a disappointment or a failed collaboration it all comes down to risk being deemed worthwhile or not. The focus is on each side doing its best and seeing it in one another. If both sides are content with the others’ performance, that in itself is trust enough to get a pass.
As we have summarised it is evident on the East side of Asia, there are tea and exclusivity. Be prepared to meet a lot of times before closing a deal and be prepared to talk BIG numbers, otherwise forget it. On the South side of Asia, it’s about speaking with caution but also being open to the values of your counterparts. In the southeast we see a retail bloodbath of competition; you need to have your eye out for the ones on the top of the many constructed pyramids. And finally, Europe with its focus on presentation and capability is probably one of the only regions where the stereotypical business person will grant you a Partnership without necessarily liking you based solely on well-meaning presentation and an example of skill.
So gathering from the simplest information just on the surface of these very complex cultures we can distinguish some differences that you should probably cater to when in a foreign domain. At the end of the day, a Partnership is not only about you benefiting; it is also about your Business Partner being content with you as a person and example of principled work. This can encourage recommendations in the future and can make a Partnership flourish along with your career. Being selfish is basically shooting yourself in the leg, and to ignore the cultural norms of other countries would be an act of selfishness on your behalf.