Asia’s First Free Stock Trading Appby Fintech News Singapore April 27, 2016
8 Securities, a Hong Kong-based fintech startup, has launched the first free stock trading app in Asia.
The new mobile app lets users trade over 15,000 US and HK stocks and index funds for no commission and without minimum balance or account fee.
The decision of a zero dollar commission policy came following a research study conducted last year on online brokerage in Hong Kong which found that top priorities for customers were ease of use, mobile accessibility and low cost.
“The price of executing a trade has gone down a lot these past years,” Mathias Helleu, 8 Securities’ executive chairman told Bloomberg. “It’s always the same game: the more volume you have, the more you can scale. And technology helps.”
“Then it’s about choosing to pass on to the customers or not. There are several ways we can spend our money: one would be very expensive advertising, another one would be free commission, and we chose free commission,” Helleu said.
Mobile is very important, notably for Asian customers, he noted. “That’s what they really care about, a mobile app.”
“The second is price. People are still very sensitive to price [in Asia]. Frankly, 80% of consumers do their online trading with banks and it’s not cheap, it’s not cheap at all.”
The next version of the trading app will include interest and behavior based alerts, the company said in an email announcement.
In addition to the launch of its free stock trading app, 8 Securities is introducing Chloe, the world’s first digital financial assistant. Still under development, Chloe will be using machine learning to provide personalized mentoring and insight for customers.
8 Securities further said that it will soon launch margin lending for active traders. This would allow the company to earn revenue by collecting interest from users’ cash deposits.
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Licensed in Hong Kong under the Securities and Futures Commission, 8 Securities expanded to Japan and mainland China following a US$9 million Series B funding round raised in August 2014. The company is said to be managing over US$600 million in customer assets.
In 2015, Robinhood became the first brokerage to offer zero trading commissions for US listed stocks as well as zero account minimums. Robinhood, which aims to make financial tools accessible to everyone, has inspired a new class of online brokerages.
In Europe, London-based online brokerage iDealing has followed the lead of Robinhood and removed brokerage commission for stocks listed on the Dutch, French or Belgian Euronext markets.
In December 2015, iDealing became the first online brokerage to offer commission-free trading in the continent.
Low cost and mobile-first products such as 8 Securities and Robinhood, are much prized by first-time investors and the Millennial generation, a market segment that many online brokers are trying to engage with.
80% of Robinhood customers are said to be Millennials.