Goldex is bringing Amazon-like usability to gold trading: Fintech interview part 19

An encounter between a seasoned equities trading executive and the archaic process of trading gold led to the creation of Goldex Technologies.

“As a customer I did not like this,” said Sylvia Carrasco, who founded the fintech last year.

Twenty years ago Carrasco helped set up the electronic trading for equities at Credit Suisse as part of a team of about 10 people. An investment banker in the City of London, with a non-tech financial background Carrasco was also involved in the creation of the Financial Information eXchange (FIX) a communications protocol for real-time exchange of information related to securities transactions and markets. She has been an advisor to companies trading electronically since

But it was Carrasco’s bad experience as a consumer of gold trading and not her decades in the financial services sector which flipped the innovation switch.

Today she is disrupting the Gold trading sector through Goldex which launched in 2018.

About four years ago Carrasco started looking to make personal investments in gold, which at the time she said she didn’t know that much about.

“I found it was pretty much the way we were in equities 20 years ago,” she told Computer Weekly. “I saw an opportunity to disrupt the way people buy gold which was  very manual.” She said it involved people having to pick up the phone and because it is unregulated people need to be wary of what’s on offer.

She said institutional investors in gold require pretty much manual processes while for retail customers there are options to buy over the internet.

Physical gold is not regulated and must be bought from a limit number of gold bullion trading companies. “When you want it you buy it from a provider, who buys the gold first and sells it on to you. This makes it more expensive and they take advantage of the large spread and also charge commission,” said Carrasco. “It is not regulated so every single provider can put whatever price they want as there is no market that dictates the price”

She said: “People investing in gold can easily get slightly lost because they are taken advantage of and are not really told much about why it is a certain price.”

She said when gold is then sold-on there is a problem because people are forced to sell to the companies they bought from. “You may have bought for a decent price but when you sell they will whack you.”

This and the fact that there is very little electronic trading available, makes the gold trading sector a prime sector for disruption.

Carrasco decided to set up a technology company to support gold trading. She did not want to become a gold trader and own gold. “All I am doing is creating a markletplace, like Amazon,” she said.

Goldex connects a variety of gold bullion providers. The bullion providers put their prices on the system and users only see one consolidated price. “When a customer asks us to buy we send the orders through routers to the best price,” said Carrasco.

Goldex is independent and doesn’t make any money on the prices, doesn’t  own any gold, and has no favourates within its gold provider community, stressed Carrasco.

She said re-selling to the providers uses the same process, which helps achieve the best price.

Goldex offers the platform through an app. The customers deposit money and can used the app to automatically look for the best price for gold or they can look themselves. They can set trading parameters to automate trading at a certain price for a certain time period

Like in all trading up to date information is vital. To this end the Goldex app provides an information service. “We scan the web for anything to do with Gold , which is constantly updated,” said Carrasco. Customers also have access to charts and the app does trade recommendations to clients understand the best time to buy and sell

The team started coding in 2016 and it took two years from having the idea to launching the company.

Carrasco said Goldex has several thousand users and 10 members of staff, including five developers, all based in London

“The biggest challenges were first of all raising money which is more difficult for women in fintech and the second biggest challenge was to be the first to set up this type of businesses in gold trading,” she said. “We are the first and only marketplace to buy and sell good so we had to break a lot of barriers. We had to do a lot of thinking and digging around business models.”

Goldex’s plan is to grow in an organic way. “I could have spent a million pounds and acquire 50,000 customers, but I don’t want to grow that way,” she added.

Carrasco said she has been surprised by how much the company has grown organically.

Read the previous fintech interviews

Part 18 Azimo, Part 17 YoyoPart 16 BudPart 15 PrevisePart 14 FinastraPart 13 InstaReMPart 12 EucapsPart 11 AimBrainPart 10 MenigaPart 9 TrueLayerPart 8 InvestCloudPart 7 ClauseMatchPart 6 Rebuilding Society, Part 5 HonchoPart 4 AkoniPart 3 WriskPart 2 CreditLadderPart 1 Taina Technology

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