The future of trading and brokerage

Wael Salem, CEO of Tradescoio, share with Banker Middle East, how the trading and brokerage business is changing

From your point of view, what are the current trends in trading and brokerage?

The current trends in trading and brokerage are focused on automation using digital technology that will make transactions easy, transparent, accessible anywhere and cost-effective.

Increasingly, there is a demand from retail bank account holders for brokerage and wealth management tools to be accessible for all levels of investors. It will no longer be a service available only for high net worth individuals and it should be available to retail investors. Thus, the barrier to entry is lowered and more low-mid income investors will enter the market.

Accordingly, brokerages must be able to understand the investors needs and preferences and based on that insight, brokers can provide an appropriate product or service for their customers. Transactions will become easier with the use of mobile and digital solutions that allow investors to have access to capital markets and a full view and report on net asset value in real time. Aside from real time updates and comprehensive reports, wealth management tools must have fee transparency to eliminate client’s doubts on the issue of hidden charges.

“THE CURRENT TRENDS IN TRADING AND BROKERAGE ARE FOCUSED ON AUTOMATION USING DIGITAL TECHNOLOGY THAT WILL MAKE TRANSACTIONS EASY, TRANSPARENT, ACCESSIBLE ANYWHERE AND COST-EFFECTIVE.”

Another trend is that through digital technology, an investor can be onboarded very quickly. Through digital onboarding and digital compliance verification technology, it allows the customer to be accepted in less than 30 seconds. Behavioural economics will also play a larger role where financial institutions reward their investors and traders based on their day to day spending and saving practises. Investors will also have access to aggregator systems that will allow a holistic wealth tracking across multiple assets such as liabilities, return on assets including property, physical assets.

The digital experience of the employee is just as important as customer digital experience. Companies need to invest in digital employee experience for the middle and back office operations to ensure effective and productive day to day operation which has been proven to be a success factor in operating a successful brokerage.

AI solutions will also play a key part in brokerages and help to streamline banking operations so that the bank can process higher volumes efficiently. Lastly, the increase in social trading technology has aided banking and brokerage customers to come closer and review and mirror each other trading and investment ideas easily. By bringing the trading ecosystem closer and enabling them to discuss strategies and share ideas this will result in an increased confidence level.

Tell us more about Tradesocio and what the company does?

Tradesocio was established last 2015, we started as a small group of professionals with backgrounds in technology and financial services. All of us were driven by a common vision: to transform the way financial services are offered and accessed, by making it easier for financial service providers to attract a wider clientele, ranging from retail investors to high-networth institutional investors.

Tradesocio, provides a cutting-edge software as service (SaaS), that enables our banking and brokerage customers to offer investment management and brokerage solutions to their customers accessible on any device. We also develop customised solutions for financial institutions operating in multiple ancillary fields such as prime brokerage, provident funds and wealth management. We aim to be the technology of choice that supports financial institutions to keep pace with the digital transformation and fintech innovation.

Our team placement is an extension of both of our customer’s IT and product teams. We are involved in the day to day basis operations, planning, building products with our customers and delivering these products efficiently. In addition, Tradesocio also does the research and studies the customer’s journey in real-time to ensure their KPIs are met. We play an active role in product management and ensure that we deliver the highest effective return of investment towards our customers that invest in our innovative technology solutions.

What is your focus on this year? What are your plans for the company?

This year Tradesocio will focus on our newly set-up headquarter located in Dubai at the Dubai International Financial centre (DIFC). We aim to hire 30 top management people in our DIFC office over the next two years, which will play a vital role in Tradesocio's expansion in the MENA region. We will also prioritise the MENA and African markets, as in these regions the fintech industry is still in its growing stages and we expect an increased demand for our products and services in MENA.

Secondly, Tradesocio will also be expanding business development on its satellite offices in Singapore and London to better cater to our clients effectively in the region. The Singapore office will target the APAC region, specifically Hong Kong.

We also have a new product release this year, the Investment Suite and launch our AI component. Tradesocio will work closely with our strategic partners and fintech accelerators globally and engage with our potential customers across multiple conferences and roadshows targeting financial centres globally.

What challenges do you expect the market to face this year?

This year will be very busy and we expect a lot of risks and challenges ahead. We must be very cautious in dealing with these challenges so that we can create solutions that not only solve problems now but can be applied to other challenges that may lie ahead.

"THERE IS A RISK IN THE BANK WHO TRY TO CREATE THEIR IN-HOUSE TECHNOLOGY AND HAVE FAILED DUE TO LENGTHY TIMELINES, LARGE BUDGETS PROJECTS AND CHALLENGES IN GOING TO MARKET."

— Wael Salem

The first challenge is that financial institutions are in a race to launch new products and services to remain competitive. There is a risk in the bank who try to create their in-house technology and have failed due to lengthy timelines, large budgets projects and challenges in going to market. Thus, they are switching to sponsoring fintech accelerators and acquiring technology that can be deployed quickly to introduce the latest services for their customers while they remain focused on their core business.

This sector also faces new entrants to the market which are not traditional financial companies but have expanded their offering to include fintech and financial services. Thus, smaller specialised companies face a threat from large corporations such as telcos and super apps that have added financial services to their existing offerings.

This year also will mark a significant rise of other fintech companies who want to have a share of this growing market. Due to the significant increase of new entrants providing banking and brokerage as a service, financial institutions will be increasingly exposed to lowering their margins in order to stay competitive.