How Your Brokerage Can Gain an Edge with Digitally-Savvy Traders
June 9, 2023
By Acuity Trading
The Internet and cutting-edge tools have led to a ‘tech-tonic’ shift in trader demographics. According to Saxo Markets, the average age of traders declined by 5 years over the 15 months from January 2020 to March 2021. The average trader today is a Millennial around 35 years of age. Meanwhile financial awareness among Gen Z and Gen Alpha is already significantly higher than when the earlier generations were at their age. This means the average age of traders could decline further, as digitisation provides greater exposure to the younger generations and creates excitement around the possibilities offered by the global financial markets.
Transitioning Trader Behaviour
The lower age of entry to trading has increased the overall risk capacity in the market. The younger generation is earning well and is not yet burdened with family responsibilities. They have funds at their disposal and are keen to actively diversify into different asset classes, focusing on wealth creation to improve their lifestyle.
An important aspect of the young cohort of traders is that they are tech-savvy. With information at their fingertips, they have got used to researching, analysing, and paying attention to every aspect that affects their earnings, including spreads, slippage, and maintenance fees. At the same time, their attention span is shorter. They expect their trading experience to be highly interactive and real-time.
The one thing the YOLO generation fears most is missing out on opportunities. Mobile trading has empowered retail traders to trade more frequently. Advanced tools such as trading bots assist them in placing trades. While technology may have expedited the onboarding process, it has also increased attrition. Traders now demand much more from their brokers to continue trading with them.
What Do Young Traders Need?
Younger traders do not check news channels 24×7. Instead, they depend on brokers to provide all the market information they need.
With the proliferation of data, the number of factors that move the markets has multiplied. Keeping track of all these from a single source has become indispensable for successful trading. New-age traders expects their brokerages not just to facilitate trading, but also to empower them with best-in-class tools and education.
Given the extent of information at their disposal, these traders are keen to use technical, fundamental, and sentiment analysis to speculate price movements. They are also aware of the importance of alternative data analysis to gauge the state of the financial market.
This ‘infobesity’ presents a big challenge, that of filtering out relevant information from the noise. A brokerage must support these inexperienced traders to make informed trading decisions by leveraging technology.
Acquiring and Retaining Tech-Savvy Traders
Sharing tech-driven insights can spell multiple benefits for a brokerage:
Sharing alerts on social media platforms and blogs can improve the discoverability of trading opportunities, attracting more traders to the platform.
Reliable trading data boosts trading activity.
Informed traders make better decisions and are more likely to continue trading.
A brokerage can facilitate these by addressing the most pressing trader need, which is access to timely and actionable trading insights.
The process is straightforward. A brokerage must begin by accumulating data from a variety of sources, including economic data calendars, corporate earnings calendars, news stories, social media updates, and alternative data reports. Next, it is important to classify the information and use it to generate fundamental, technical, and sentiment insights. Finally, these need to be presented in bite-sized and actionable alerts. This improves trader confidence, encouraging them to place more trades.
Is that enough for your tech-savvy traders? No. The most relevant information and insights need to be integrated with price charts to enable traders to place trades immediately. This requires brokers to harness the power of both technology and data. Brokerages can use AI-driven opportunity scores and comprehensive asset, segment, and industry-based insights to boost trader confidence.
This information can keep traders engaged on the platform and boost trading activity. However, a brokerage must ensure they are visible to prospective customers as well. This can be done by sharing information and insights on their social media profiles and digital marketing campaigns.
The task of garnering data and presenting it in the most easy-to-digest way can seem overwhelming. That’s where partnering with a cutting-edge technology provider comes as a solution. For instance, Acuity’sAsset IQ widget enables brokerages to empower their traders to discover unique opportunities and make quick decisions in the fast-moving financial markets. Further,Analysis IQ helps generate and present AI-based reports to help traders make better trading decisions.
Engaging with the New Generation of Traders
Research shows that the average age of investors globally declined by 10% to 15% during 2020-2022. Sophisticated tools built on advanced technologies help brokerages remain relevant for this dynamic and flexible generation of traders. Partner with Acuity to improve trader acquisition, engagement, and activity on your trading platform. Request a demo to learn how you can make your brokerage future ready for the traders of today and tomorrow.