Equity Trading

Part
01
of three
Part
01

Equity Trading: Social Media Channels

Online stock brokerage company Zecco launched a stock trading app on Facebook, while TD Ameritrade rolled out an AI-powered chatbot that allows stock trading on Twitter Direct Message and Facebook Messenger. India's Motilal Oswal AMC has a WhatsApp number that investors could contact and transact with after authentication.

Zecco Wall Street

  • Wall Street is a Facebook app provided by the online stock brokerage company, Zecco.
  • The app acts as a financial hub for Facebook users, updating them with real-time statistics, quotes, and charts, such as the most actively traded stocks.
  • Through Zecco Wall Street, users can request individual quotations and place trades, a feature reported to have a "patent pending" status.
  • Users can also do traditional actions on Facebook, such as "liking" certain stocks, leaving comments, or sharing.
  • All features are available to any Facebook users, except for placing trades, which requires the user to be a Zecco customer too.

TD Ameritrade

Motilal Oswal AMC

  • Motilal Oswal Asset Management Company is an investment company in India that added social media, WhatsApp, to its trading stock trading platforms.
  • The platform is available only to the company's existing investors. It works similar to mobile banking, where an investor contacts a hotline (in this case, a WhatsApp number) to do transactions after authentication.

Research Strategy

To provide at least three examples of stock trading through social media platforms in the U.S., we searched several industry-related websites. We discovered that the technology that allows direct trading through social media, particularly Zecco Wall Street in Facebook, has a pending patent, which means that Zecco may be the first and the last broker to offer such features. Although there may be other creative ways to use social media in stock trading, such as the case of TD Ameritrade, which developed a Twitter Direct Message and Facebook Messenger chatbot, we did not find more in the U.S. So, we expanded our research to cover investment companies outside, where we found the case of Motilal Oswal AMC in India.
Part
02
of three
Part
02

Client Trading Tranactions: Best Practices

Providing real-time data, screeners for stocks and educational tools are the best practices that stockbrokers use in their digital interface to provide smooth transaction experiences for customers who trade stocks.

1. Real-Time Data

Why it is considered a top practice


2. Screeners for Stocks

  • Screeners for stocks prove one of the best practices that stockbrokers websites and mobile applications employ as their digital interface for smooth transaction experience for customers who trade stocks.
  • The option of screens for stocks in most of the stockbrokers' websites and mobile apps is aimed at helping customers who trade stocks with the ability to analyze stock markets.
  • With the help of a stock screened digital interface on the website or mobile application, customers who trade stocks can filter stocks based on numerous parameters and metrics. Some of these parameters and metrics include market cap, stock price and dividend yield among many other parameters.
  • In essence, a stock screener as a digital interface plays a pivotal role as it enables customers to carry out a fundamental analysis of the stock market before trading.

Why it is considered a top practice


3. Educational Tools

  • For smooth transaction experience of customers who trade stocks, educational tools prove important as part of the digital interface. It is one of the best practices and digital interfaces in most of the stock brokers' websites and mobile apps.
  • Most of the customers who trade stocks have limited knowledge relating to stock markets and trade. This makes it relevant for stockbrokers through their respective websites and mobile apps to offer education, and thus have it as part of their digital interface.

Why it was considered a top practice


Research Strategy

We began this research by searching any awards of the best online stockbrokers. This research approach aimed at identifying prominent players in the stockbrokers who have received awards for the best practices in their digital interface. Using this strategy, we managed to find different awards that were conducted by leading financial publications including Investopedia, Barrons, and Stockbrokers. Since Barrons awards were behind a paywall, we focused on Investopedia and Stockbrokers awards and which were corroborated to find the top companies. The area of focus was on companies that were awarded under the best stock trading apps and best online trading platform awards categories. Using this approach, we managed to identify companies that were awarded for their websites and mobile applications.


Part
03
of three
Part
03

Equity Trading: Effects of 5G Network

With regard to trading and the stock market, industry experts expect that 5G will change the banking industry via widespread transformation of capital markets, and an increasing number of investments in 5G stocks, and significant advancements in real-time mobile trading.

5G Will Transform Capital Markets

  • This will occur as consumer demand for digital services that depend on 5G increases, which will ultimately force financial institutions to level up to this technology. Currently, banks have been slow to adopt new technologies, however, HCL Technologies's global client partner of financial services, Baskaran Subramaniam, states that "this cannot last for long."
  • This transformation will be the result of changing customer demographics who will expect an elevated level of customer service via their preferred channels. This mounting pressure will see banks forced to "undertake massive reforms in the way they use technology, for internal operations and customer engagements alike," according to Subramaniam.
  • The adoption of 5G by financial institutions will increase both speed and security, which Subramaniam notes will "revolutionize the capital markets, shortening settlement cycles considerably and removing latencies with real-time mobile trading capabilities."

Increasing Investments in 5G Stocks

  • This change is already starting to occur, as the FCC voted to "streamline 5G infrastructure" back in September of 2018. As a result, there will be an increasing level of deployment of high-speed broadband wireless networks and 5G services being made available to the public, according to insights published by TD Ameritrade.
  • This large scale level of digital disruption is creating new investment opportunities with regard to 5G, and is even in a position to create entirely new industries. This increasing disruption is slated to take hold between 2020 and 2035, according to Qualcomm.
  • This disruption will create need for investment in this space, as there will need to build things like more cell towers, new types of 5G compatible smart device technologies (and all their associated parts). McKinsey & Company suggests that 5G will become widespread in around 2025.

Advancements in Real-Time Mobile Trading

  • 5G technology will be able to support "high-frequency real-time mobile trading" in a way that current technologies cannot. This is because 5G enables latency levels of just 1 millisecond -- This is true of 5G URLLC (ultra-reliable low-latency communication).
  • Although such tiny fractions of time may appear insignificant on the surface, these tiny bits of time are very important in the financial sector as "even fractions of seconds can result in millions of dollars of gain or loss in the stock exchange," according to Sebastian Barros, regional head of telco sales at Google.
  • This change will occur once the URLCC specification is complete. The current completion target for phase 2 the URLCC development is June 2020.


Sources
Sources