“(Prop trading) value proposition to the client issuch that this has attracted a large number of users who never considered FXand CFD trading before” Drew Niv, Chief Strategy Officer at ATFX Connect,shared the comment when asked whether prop trading is good for the industry. Speaking to Jonathan Fine, Content Strategist at UltimateGroup, Niv, a long-time industry expert, defended proprietary trading as aforce for market expansion, even as he warned brokers to brace for a loomingwave of competition from neobanks and fintech giants.He admitted that prop trading remains “mathematicallyunsound” in many of its current incarnations, yet argued it has become acrucial gateway for new entrants into the online trading world. The Prop Trading ParadoxATFX is a global online forex and CFD broker thatoffers trading in currencies, indices, commodities, shares, andcryptocurrencies via the MetaTrader 4/5 platforms and its institutional ATFXConnect offering. The broker operates under the “ATFX”co-brand across multiple regulated entities, including AT Global Markets (UK)Ltd.Niv acknowledged the model’s flaws — high churn rates,inconsistent performance metrics, and patchy risk controls — but sees gradualmaturation. Early prop challenges, he explained, were driven “99.99% by luck,”yet are now evolving toward more realistic trading conditions and skill-basedevaluation.“But the problem was that initially the qualifyingrules of you won and you qualify for a quote unquote real account. Those ruleswere too loose. And people essentially won by a lot. They're still too loose,but they're getting tighter. The leverage restrictions are getting more.” He likened today’s prop trading phase to the “wildwest” period preceding the rise of regulated retail FX two decades ago. The endresult, he suggested, will again be positive: “Just as retail FX expanded themarket 25 years ago, prop trading will bring in a fresh generation of traders.”Neobanks and the Threat of ScaleNiv struck a more cautionary tone when theconversation shifted to neobanks like Revolut and Monzo entering the tradingarena. Drawing on FXCM’s experience in Japan — where internetconglomerates like Rakuten and GMO wiped out hundreds of brokers — he warnedthat the same dynamic could now play out in Europe.“And what happened around those years is that thelarge, essentially the Rakuten, which is like the Amazon of Japan, GMO. So youlook at all these Internet giants who had an endless amount of inventory fromonline advertising, all of the stuff that they do. And a user base.”“And therefore, they had a user base and a massivebrand. And their cost of acquisition was tiny. And they had to essentially say,oh, if you open an account with us, you know, like Rakuten is a good example.”You may also like: “MENA’s Digital Banking Challenge Isn’t Demand; It’s the Restrictive Infrastructure,” Jas Shah at FMLS:25Niv argued that brokers face a choice: specializeregionally, expand into multi-asset offerings, or risk being outspent. “And most FX and CFD brokers are self-funded. Theymake some money, they keep it. They don't need external investors until IPO,but until really. When you have to compete on a much grander scale and you'regoing to need a much larger scale.”“These firms have the advantages that when they're notprofitable, they can easily raise money and large sums of money in bulk.Because they do not have the earnings volatility of a B-book pure shop.”Shifting Geographies and New FrontiersThe conversation also touched on emerging markets,which Niv described as “where the action is shifting.” Once overlooked, he saidregions like Southeast Asia, Africa, and the Levant now boast real wealth andrising trading participation.“Who would have thought 15 years ago Africa would be ahot market? Who would have thought, you know, outside of South Africa, whichalways was. But the other countries were definitely not.”“Who would have thought that sort of the non-GCCMiddle East would be a hot market. Jordan, all these places. ATFX is the secondlargest office, if I'm not mistaken. So that 15 years ago, you'd call me crazy.It never would have happened.” “Today, it's a real place with real income, with real,you know, wealth.”More from FMLS:25: “Prop Isn’t Finished, but If You’re Coming into Prop Now, You Are,” FMLS:25 TakeawaysNiv predicted that global financial “supermarkets”would eventually buy their way into these growth regions. “It’s not happeningtomorrow, but sooner than most people think,” he warned. “Look at Kraken acquiring NinjaTrader — if that weren’t an American firm, its first targetwould’ve been one of the top 10 FX brokers.”Industry Reflections: Convergence and FocusReflecting on the broader discussions at the summit,Niv said the line between institutional and retail trading remains less blurredthan some suggest — though convergence is clearly accelerating. What he valuesmost, he added, is perspective.“I was not of the opinion, given my experience, thatthe retail industry and institutional business is converging. I think otherpeople's experience is definitely different. But I think that's something thatthat would be a cool debate.”But I think that's something that is a very, is a verybig deal. When asked whether he expected to win his upcoming debate on whetherprop trading is good for the industry, Niv laughed: “I rigged it — I picked thefavorable side. It’s a biased room.”This article was written by Jared Kirui at www.financemagnates.com.