The age of modernization with gifted technological invention and the introduction of the internet led to merging the lines and resulted in profitable big Ideas.
One such merging of the lines is the financial and the internet world. The Neobrokers.
Neobrokers work as a digital financial service provider for the trading and investing on a broader consumer base with more accessibility. The Neobrokers evolved in 2005. The financial operation is conducted in the digital space.
Neobrokers are categorized as online brokers, trading platforms, social trading platforms, or retail investment platforms. The companies are partnered with banks for financial transactions in a more secure way.
The idea of the Neobrokers functions without any physicals office rooms for consultation purposes but the online services can be accessed via mobile app or desktop website. The service provides more personalized and easily accessible from home.
As per financefeeds, the market size of the Neobrokers is expected to reach $12.5B by 2028. The annual growth rate (CAGR) is forecasted to be 5.6% from 2021.
The app or the website is easily accessible 24/7 and not needed to be during regular trading hours. A user-friendly structure provides the customers with online apps for buying and selling securities. Some of the neo-brokers operate with minimal charge or even free services. However, the free service often comes up with hidden transaction service costs.
Basic knowledge of the stock market or assets, a small amount of money, and internet service are more than sufficient to make those profitable clicks. The users are growing at a rapid pace and due to lockdown, customers got ample amount of time to go through the new offering and expand their wealth or even get some new skills.
The things common to the Neobrokers are:-
- The services are recently created or supplement the already established services.
- The advertisements costs and fees are very low.
- A limited service is being offered by online brokers.
- The trading of the securities via a browser-based web trader or smartphone apps.
- A limited number of trading venues are offered for execution purposes.
The key Neobrokers players are Bitpanda GmbH, XTB International Ltd., Trade Republic Bank GmbH, eToro Ltd., Robinhood Markets, Inc., Stash Financial, LLC, Plus500, BUX, E-Trade Financial Holdings, LLC, and Webull Financial LLC.
In the Netherlands, Dutch Neobroker BUX became the first broker with a high number of clients across Europe via investing app, BUX Zero.
As per Statista, Neobrokers are expected to reach market revenue of US$market revenue of US$3,035m by 2022 and in India, US$18m. The revenue generated per user in the Neobrokers segment amounts to US$423,791m by 2022 and in India by US$3.1.
The number of users is expected to increase in the Neobrokers segment to 69.47m by 2026. In India, the number of Neobroker users is expected to amount to 6.40m users by 2026.
The Fintech segment is profitable and in the long run with more users, the market is going to expand literally in a booming way. With huge restrictions due to pandemic protocols, such online platforms with the secure financial transaction are the best way to make online deals.