Wednesday, July 31, 2019 10:40AM / by Proshare Research
A growing number of trading clients have adopted digital platforms to execute capital market transactions, and this trend has encouraged capital market operators (CMOs) to upgrade their digital trading platforms to improve user experience. Critical to CMOs service propositions have been issues of:
The growing Nigerian digital trading experience has meant that CMOs have had to upscale technology and retrain staff to interface with customers on new platforms other than one-on-one personal contact. The deepening of the technological interface between CMOs and customers over time has improved the ease of transaction, increased customer access to market-related information, and made payment and settlement systems more efficient and effective. Competitive imperatives have required CMOs to take the customer as the centre of their digital market space, with the customer’s trading experience being the unique measure of corporate success.
This perspective of financial markets is particularly important in the context of the fixed income debt market, which has become the largest market for tradable financial assets in Nigeria. Of the N195.09trn financial market size in 2018 N182.86trn or 93.73% can be attributed to the debt market (FMDQ) while 6.01% or N11.72trn is attributable to the listed equities market (NSE) and N0.51trn or 0.26% linked to the unlisted market (NASD).
As the millennial population grows older and becomes, wealthier, their influence over the domestic financial market will increase. The need for versatility, creativity and speed is the defining requirements of successful digital financial service delivery in years ahead. How CMOs grow their digital customer base is a reflection of this new requirement for market sustainability and profitability. Millennial clients with access to massive data, and with limited attention span and reduced patience for detail will shape the service pattern of the future.
This report evaluates the use of online trading portals. In the course of carrying out the research, a set of questionnaires were administered as a tool for getting users to assess the functionality, flexibility and speed of the portals. A total of 587 valid responses were received and subjected to statistical analyses.
The study reveals that the majority of users, about 34.42%, of these portals have monthly Income that fall within the range of N101,000 – N300,000 while about 36.24% of the respondents invest 5-10% of their income. A sizeable 66.32% of the respondents expect capital appreciation when choosing an investment option while 60.65% of the respondents prefer to invest for long term.
Out of 586 respondents, 18.66% of them use the Meritrade Platform which represents the highest percentage among our survey respondents, 12.46% use Mytradebook while 10.92% use Investnow. Capex Trade and WSTC e-Trader both have the lowest percentage with 0.17% of the users recorded respectively. 57.66% of the users of these portals look out for Easy Trade Execution and 76.15% of the users usually trade in Equities.
52.85% of users said that the portals met their needs while 67.18% conceded that their brokers were very responsive to their queries. Despite these positives, users admitted to experiencing a few challenges as 17.09% of the respondents confessed to not being able to use certain features of their brokers’ platforms.
A review of the ranking summary from previous online trading report reflected that EasyTrade, InvestNow and CordrosTradeButton emerged 1st, 2nd and 3rd respectively in H1 2016. Meritrade, EasyTrade and Afrinvestor emerged the top ranked in the H2 2016 edition of the report while Meritrade and EasyTrade maintained their ranking position in the 2017 edition with the exception of Mytradebook replacing Afrinvestor in the 3rd position. The 2018 edition saw Mytradebook, Meritrade and EasyTrade emerged top three (3) in that order. In 2019, therefore, the top ranked were Mytradebook, Meritrade and InvestNow.
Similarly, a review of the ranking summary for FX trading platforms from previous online trading report reflected that MeriFX and ForexTime emerged 1st and 2nd respectively in the 2017 edition while Eagle Global Market, Alpari, and ForexTime CordrosTradeButton emerged 1st, 2nd and 3rd respectively. In 2019, therefore, the top ranked were Eagle Global Market, ForexTime and HotForex.
According to users, brokers can improve on their services by providing better research reports and the ability to trade other securities asides equities to their respective clients. This is expected to further improve and change users’ perspective positively as 85.12% of respondents affirmed that their online trading experience has changed their perspective about trading and investing in the Nigerian Financial Market.
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The result of the survey was a product of responses received from CMOs and their customers. The results may have witnessed slightly different outcomes if a larger sample size and a more robust response from customers of CMOs were obtained. The results are a reflection of the best interpretation of the relative trading positions of the CMOs that responded to the survey.
For: Proshare Editorial Board
Reshu BAGGA Saheed KIARIBE
COO/Director Director, Research
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