In this article, the Head of Trading & Structuring at SBM Capital Markets Ltd, Dharmeshsingh Mohadewo, discusses the brokerage business growth across the globe, as it grapples with present-day challenges, with the role of compliance and AI, shaping the market offerings. He discusses the undergoing transformation, emboldened by the SBM Capital Markets Ltd, as an execution partner and ally.
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The brokerage business is undergoing one of the most significant transformations in its history. What was once rooted in personal relationships, trust, and controlled access to markets is today being reshaped by artificial intelligence, democratised data, and a new generation of highly active traders.
For brokerage firms, this shift is not optional – it is existential. The winners will be those who can combine technological innovation with sound risk oversight and human judgment.
Traditional Brokerage: A Relationship-First Model
In the traditional set-up, the broker played the role of trusted intermediary.
- Clients relied on brokers for market access and execution, as direct connectivity to exchanges was limited.
- Personal relationships and advisory expertise were at the centre of value creation.
- Market knowledge was concentrated; brokers had an advantage through exclusive research and privileged information flows.
- Risk management processes were batch-based, focused mainly on end-of-day positions rather than intraday exposures.
This model worked in a slower, less transparent marketplace, but its reliance on human discretion and limited technology meant it was ill-prepared for today’s digital speed.
The Modern Brokerage Ecosystem
The industry today operates in a landscape characterised by three defining forces:
(a) Technology and AI-Led Execution
Artificial intelligence has moved from theory to practice in brokerage.
- Algorithms now analyse liquidity, spreads, and volatility in real time to deliver optimal execution.
- Machine learning models are applied in predictive risk management, spotting leverage and liquidity risks before they escalate.
- Natural language and sentiment analysis tools scan global events instantly, feeding into trading strategies within seconds.
The broker’s edge no longer lies in privileged access, but in processing power and intelligent decision-making frameworks.
(b) Empowered and Sophisticated Day Traders
Retail participation has expanded dramatically, but it is not the retail of old.
- Traders now operate on institutional-grade platforms with access to advanced charting, derivatives, and even automated trading bots.
- Leverage and fractional trading allow individuals to replicate strategies once reserved for hedge funds.
- Social trading networks and coordinated sentiment-driven strategies have shown their ability to disrupt institutional flows.
The line between retail and institutional activity has blurred – retail traders are now market participants of consequence.
(c) Data as the Differentiator
Information asymmetry has diminished. With access to Bloomberg terminals, APIs, and low-cost market feeds, the key question is not who has the data, but who interprets and acts on it fastest.
New Standards in Risk and Compliance
As execution becomes faster and more automated, risk and compliance must evolve at the same speed.
- Intraday Monitoring: Brokers must track positions, leverage, and collateral in real time, not post-trade.
- Intelligent Surveillance: Automated systems now detect unusual trading patterns, AML risks, and compliance breaches instantly.
- Operational Resilience: With brokers increasingly connected to clients and counterparties via APIs, cybersecurity and continuity frameworks have become essential safeguards.
The broker of today is as much a risk manager and systems operator as an execution agent.
The Future Role of the Broker
Technology is not replacing brokers but reshaping their role. The future belongs to firms that can:
- Merge AI and human judgment, especially in volatile or less liquid markets.
- Offer different service models from streamlined, low-cost execution for active traders to tailored advisory for institutions and wealth clients.
- Embed AI and automation into compliance, settlement, and reporting, ensuring resilience under regulatory scrutiny.
In this future, brokers act less as market gatekeepers and more as navigators of complex, data-intensive ecosystems.
Redefining Prime Brokerage
At SBM Capital Markets Ltd, we have embraced this transformation by building an augmented and dynamic prime brokerage platform.
- Integrated Solutions: Our prime brokerage combines multi-asset execution, global custody, and financing facilities, enabling clients to access both developed and frontier markets seamlessly.
- Technology-Led Infrastructure: Through automation, straight-through-processing, and digital reconciliation, we ensure execution is both efficient and resilient.
- Advanced Risk and Compliance Oversight: We operate with real-time leverage and collateral monitoring, predictive compliance checks, and automated reporting, ensuring that exposures are actively managed.
- Adaptive Client Approach: Our model recognizes the diverse needs of day traders, institutions, and high-net-worth clients, offering speed and scale where required, and bespoke structuring where value-added solutions are needed.
This framework allows SBM Capital Markets Ltd to act not only as an execution partner, but as a strategic ally for clients navigating increasingly complex global markets.
Conclusion
Brokerage has evolved beyond exclusivity and relationships to embrace an era defined by intelligence, transparency, and speed. Artificial intelligence, empowered traders, and real-time risk oversight are reshaping the very core of the industry.
For firms, the challenge is clear: success lies in blending human expertise with technological capability while staying agile enough to navigate constant disruption.
In today’s financial ecosystem, standing still is not an option. The future belongs to those who not only anticipate change but lead it.
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About the author
Dharmeshsingh Mohadewo is a senior financial markets practitioner with nearly two decades of hands-on experience across trading, market surveillance, investment strategy design, and research. As Head of Trading & Structuring at SBM Capital Markets Ltd, he leads the brokerage function, overseeing execution on local and international markets with a disciplined, client-focussed approach. His leadership blends strategic insight with operational precision, driving improvements in risk oversight, process efficiency, and the modernisation of trading support systems. Dharmeshsingh serves as Executive Director on the Board of SBM Capital Markets Ltd since May 2024.
