Exclusive: BUX UK CEO Salim Sebbata on expanding its CFDs business
FNG Exclusive Interview… One name in the online finance business that seems to be increasingly popping up on our radar screen is Amsterdam based neobroker BUX.
With BUX recently taking some steps to build up its office in Cyprus and its CFDs business (no coincidence) – including the rebranding of its CFDs trading app to Stryk – we thought that this would be a good time to catch up with BUX UK CEO Salim Sebbata, and see what he has to say about it all.
FNG: Hi Salim, and thanks for joining us. For our audience, can you please explain the difference between a “neobroker” like BUX, and FX/CFD (or now we call them multi-asset) brokers.
Salim: Thank you for having me – it’s been an exciting time for the business.
BUX offers three products: cash equities and ETFs, Crypto, and CFDs as well as spread betting in the UK. We started out as a multi-asset broker in 2014 offering CFDs on indices, equities and commodities. In 2019 we launched BUX Zero out of Amsterdam to become the fastest growing neobroker in Europe. Today, BUX has more than 700,000 clients.
While CFD firms offer leveraged long/short trading, the neobrokers cater to the long-only investing public. As such, BUX has been one of the innovation leaders in the space with fractional investing on EU ETFs as well as fractional investing plans. BUX has recently added fractional investing in the EU . Traditionally FX brokers focus on introducers and sales people. We at BUX have a marketing/service driven strategy.
FNG: BUX has been in the CFDs business for more than half a decade, but it seems that it is just now making a big push into that sector. Can you explain the opportunity you see in CFD brokerage, and how BUX intends to capitalize on that opportunity?
Salim: As mentioned earlier, BUX actually was a CFD-only firm until 2019 when we launched stock investing app, BUX Zero. We have capitalized aggressively on the COVID wave and continue to see sizeable opportunities in the EU leveraged trading space especially given the current volatility. In parallel, our BUX Zero app has been in very high demand in the markets where we are present. The Stryk CFD business operates via an FCA and a CySEC license and the neobroker is AFM regulated.
FNG: How does the CFDs business and Stryk meld with the other, investment-focused part of the company? Is there a lot of cross-selling you see within your existing client base, or will each unit – BUX and Stryk – cater to (mainly) very different client bases?
Salim: There is a clear differentiation between the BUX Zero and Stryk apps – one targets investors and savers and the other one attracts active traders that use leverage. While we share common development teams the businesses are run separately. Technology improvements in one area get passed along to our colleagues and vice versa.
In terms of client bases, we do find that there is a movement between both apps. Very active clients from the neobroker cross over to the CFD side to benefit from higher leverage and alternatively some users feel that long-term investing suits them better and switch over to BUX Zero.
FNG: The “COVID era” of the past two years has been overall very kind to the CFD brokerage sector, with record new client signups and trading volumes, as market volatility has been quite high for an extended period. How do you see the next year or two unfolding?
Salim: We expect equity and commodity markets to continue to remain volatile given the inflationary pressure on rates and equity indices. Also, policy decisions will mean markets can get shaken out at no notice. We have noticed that our client base is resilient and actively trades both sides of the markets at all times.
FNG: We understand that BUX, and now Stryk, offers trading on its own proprietary app and platform. Is that a big challenge technology-wise? Would you entertain adding MT4/MT5 or cTrader which are already fairly familiar to many existing CFD traders?
Salim: We are proud of the Stryk app, it offers a very different trading experience to the other brokerage products in the market. The ability to control the full tech stack allows us to make changes on the fly and keep improving our infrastructure thus benefiting our clients. Having your own app is a very clear USP that helps us attract new users and employees.
We can easily differentiate from the thousands of MT4/MT5 firms that compete with the following slogans: “narrow spreads, great service and award winning platform”. Our clients trade on a mid-price and pay a commission whereas 100% of the market offers a spread-based product.
FNG: What else can we expect to see from BUX in the coming months?
Salim: Stryk is a EU-centric product and we are not planning any offshore entities. In the second half of the year, we are looking to release the app in more EU app stores – we are currently present in 14 – and to add instruments to the platform.