Future of Investing
What brokers lost by focusing so much on the desktop experience
- Mobile now represents 65 percent of all digital media time.
- Online brokerage invested heavily in desktop functionality.
Sticky products build engaged audiences. That's why Yahoo Finance continues to get a firehouse of traffic. For those of us who built our portfolios on the site ten or more years ago, that's enough of a reason to go back. We've invested enough of our time and energy into the service that leaving it becomes difficult. “Having been at Yahoo Finance from the beginning, if you can get someone to build an investment portfolio on a product, you can massively increase engagement,” said Nathan Richardson, who now heads up TradeIT, a technology firm focused on retail trading. Times were different then — users spent most of their time researching and trading using their desktops. The online brokers followed suit and invested heavily in building out their online trading tools. These desktop-first tools did a fine job harnessing computing power for brokerage clients to do some pretty heavy lifting. The thing is, as internet usage has shifted from desktop to mobile, so should trading volumes. According to comScore, mobile now represents 65 percent of all digital media time, while desktop has lost 12 percentage points since 2013, contracting to 35 percent of digital time spent. “People no longer wait to go to their desktop computer to figure out what's happening in their portfolios,” explained Richardson. “They do it regularly and actively with devices they hold in their hands.” [caption id="attachment_9164" align="aligncenter" width="605"] comScore on apps vs. mobile web[/caption] It isn't enough for a broker to just recreate a web experience on mobile, either. Today's users don't want non-native apps. People want to feel that an app is trustworthy and vetted through the Apple Store. According to comScore, 87 percent of all time spent on mobile in the U.S. was spent in mobile apps. Indeed, Richardson's firm sits on the cusp of this transition away from the desktop towards mobile. TradeIt integrates US retail brokerage functionality into any app, site, or platform. That means users of the popular StockTracker app can swipe to trade after checking a stock's price or chart, without leaving the app. This is all done through bringing together various APIs into an integration partner. For his part, Richardson's previous experience running Yahoo Finance influences his current worldview, which is very much focused on the mobile experience. As brokers have replaced an insistence on acquisition marketing, tools like TradeIt increase engagement, keeping customers connected to their brokerages wherever they're surfing. The numbers bear out this trend. TradeIt's average order size is $13 thousand on mobile versus only $2 thousand on desktop. The company is also seeing triple-digit month to month growth in the number of orders it's seeing. As more financial institutions create and integrate APIs, new monetization opportunities are opening up for interested advertisers. ETF providers, which haven't had a lot of innovative channels to reach prospective customers, are turning to TradeIt to market their products. Since portfolio apps know exactly what users have in their portfolios, TradeIt can bring in an advertising component to its web or mobile integrations, providing portfolio-level targeting. Technology like Richardson's gives financial apps a lifeline by providing them with relevant ways to monetize, while giving brokers and ETF advertisers a relevant new way to reach customers. "We're helping brokers reach customers where they are, helping retail customers transact where the information is important to them, and helping apps monetize in a new way," he said. The company has 45 signed contracts with content providers with inroads into ETF sites, filling the content gaps where users request coverage, like in forex and options. Though TradeIt is a technology provider, it's a new kind of advertising network using APIs to combine data, information, and reach. As investing has shifted towards ETFs and passive fund management, there are still investors out there who prefer to pick their own stocks. And there always will be. Integrating brokerage tools through APIs into investing publications and apps directly targets these people. "My customers have $20 million in liquid assets," TradeIT's Richardson recalled a recent conversation with a private banker. "I'm not going to stop them from trading a $100 thousand account in the market. I actually encourage it."