Onboarding new investors as trading in physical commodities takes off

Trading in physical commodities is attracting new investors each day. Efficiency is key to getting them onboard quickly and compliantly.

Posted by: 
Mike Kelly
  |  
Apr 8, 2020

The world has been turned upside down by the Coronavirus and nearly every aspect of our daily lives is different. I say nearly every, as there are a few things about daily life that remain constant - our need to eat, drink, make money and, obviously, spend a lot more time online.

Trading and investing in the essentials

This need for the bare necessities and to find investments that are less or inversely impacted by the huge market volatility is driving increased trading in physical commodities.

This trend has meant significantly more people and businesses have registered with online trading platforms – some of the most popular sites, like Plus500, have thousands of active customers and saw significantly higher levels of new applications in February and March 2020.

Market forces

Supply and demand along with market sentiment are what drive prices in physical commodities trading and Covid19 has seen a fundamental shift in these elements. The price of coffee, oil, grains and precious metals have all seen price volatility in recent weeks and there are no signs that this will stop any time soon.

Online commodities trading

The sharp rise in the price of Gold at the beginning of the crisis and the subsequent price fluctuations have offered all market participants significant returns if they are able to pick the short term highs and lows.

The proliferation of online retail platforms means speculators and hedgers alike have better access than ever before. Many are looking to commodities platforms that have democratised physical commodities trading, including the likes of Goldex, one of our favourite customers.

With commodities trading is now accessible to anyone – large and small – all new applicants need to go through a KYC or KYB process to validate who they are; that they aren’t acting nefariously; and that they meet risk and compliance standards.

With trading in commodities taking off, online platforms need a way to complete KYC/KYB, AML and other compliance checks quickly, without friction or added risk, and (most importantly) virtually!

Through automated customer due diligence processes that run compliance checks on individuals or businesses, trading platforms can secure new investors while ensuring they don’t open themselves up to the risk of money laundering and other types of fraud.

Enter PassFort

Firstly, the PassFort platform is a SaaS solution, so everything is set up and delivered in the cloud, no need for physical deployment of any software elements nor expensive consultancy.

With a simple API, it is quick to deploy PassFort and integrate it with other systems you use. Then, with our Smart Policy builder, you create automated compliance workflows around one central risk-engine to start onboarding and monitoring ongoing risk.

The central risk-engine means it is fast (and not complex) to configure different policies and workflows for trading globally, with different audiences and product types.

Use PassFort’s smart Policy Builder to create automated workflows and maximise Straight Through Processing (STP) of customer due diligence. But, if an application can’t achieve STP for any reason and Enhanced Due Diligence is needed, you can collect documents and communicate with customers directly from the platform.

PassFort can be integrated with many global data providers to carry out any number of identity, fraud, risk and compliance checks. There’s no need to manage and operate point solutions, the whole of due diligence and risk management can be aggregated through a single source of truth.

Due diligence on investors doesn’t start and end at customer onboarding. You can also use PassFort to manage ongoing risk and off-boarding. If something changes in a profile, you can re-run KYC and KYB checks any time and control your exposure to risk – which is especially important during uncertain times.

Get in touch

With more people and businesses interested in physical commodity trading right now, trading platforms need a KYC, risk and compliance solution right now.

Get in touch, and we can show you how PassFort can support your business.

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