Tradeit Integrates Nasdaq Basic Real-time Market Data

Integration brings real-time market data to TradeIt’s investing technology products

TradeIt, a retail investing technology provider, has integrated Nasdaq Basic to provide real-time Best Bid and Offer and Last Sale information for all US exchange-listed stocks from the Nasdaq Market Center and the FINRA/Nasdaq Trade Reporting Facility™. Through Nasdaq Basic, TradeIt customers will now have access to the single largest liquidity pool for US cash-listed equities in a reliable and accurate feed.

“Time is money, and overnight quote updates hold you back,” said CEO Nathan Richardson. “Nasdaq’s data enables our product to update in real-time, so our users are never a moment behind the market. They can check their portfolios from anywhere at any time.”

TradeIt’s technology enables real-time account management and ordering from any app with most US brokers.  With the addition of Nasdaq data, users can see the market data and their portfolios update in real-time, versus the typical 15-minute delay in other stock quote data.

TradeIt’s end-users, who are retail investors, trade about 4x more often than the average retail client. These engaged traders watch the markets closely and often make trade decisions on the spot. Incorporating real-time quote data is essential to making investing as seamless as possible for these users.

Real-time account aggregation and live trading are available as APIs, SDKs and widgets for developers of financial apps, websites or ETF companies. By integrating with TradeIt’s SDK package, mobile developers can turn their financial app into a multi-broker order and portfolio management platform by adding a few lines of code.

About TradeIt

TradeIt is a technology that lets app developers, publishers and ETF issuers integrate any major US retail broker’s functionality on any app, website or platform to enable secure trading, account management and account opening. TradeIt was developed by venture-backed, award-winning technology company, Trading Ticket, Inc., which creates technology and tools to make investing fast, easy and safe for all retail investors. Founded in 2014, the company’s products span across account opening, funding, order management and communication. Lead investors include Valar Ventures and Citi Ventures. For more information or for a demo of how TradeIt works, please visit www.trade.it.

Staying Relevant: 5 Lessons from Millennial Investing Apps

Love or hate them, millennial-focused investing solutions aren’t going away any time soon. Startups offering robo-advisory and automated microinvestment solutions (mostly in the form of mobile apps) have acquired swaths of customers with small account sizes. While some of these startups, like Acorns, have targeted users with little money to spare, others, like Hedgeable, have targeted HENRYs (high earners, not rich yet.) All of them are betting their customers will remain loyal when they actually become rich. If this happens, these apps have the potential to seriously disrupt incumbent brokerages.

The bare-bones product these startups offer is similar to a low-fee, risk-adjusted target-date fund, something incumbents like Vanguard and Fidelity have offered since the 1990s. While these products are decidedly not-that-innovative from a financial engineering standpoint, the true achievements of these startups are their mobile-friendly UX design, beginner-friendly onboarding processes, and customer service that caters to their young users’ preferred communication channels.

We compared the mobile offerings of the top incumbent brokers with those of the millennial-focused startups. For the full findings, see the spreadsheets.

Millennial Broker Mobile Product Comparison

Incumbent Broker Mobile Product Comparison

For a quicker view, here are the top five takeaways for how to attract young customers, who might be poor today, but strive to be rich in 20 years.

Don’t Scare The Rookies

Most new investors don’t yet know what they’re doing. When they download an incumbent broker’s app, they get bombarded with promotions for advanced charting tools, stock screeners, options trading, analyst ratings, and more. They might find these features handy someday, but right now they don’t even know what they’re used for. By pushing these advanced trading products, incumbent brokers scare off potential customers by convincing them they aren’t ready to invest yet.

Sell them success, not technical tools.

iPhone 6 _ 4.7 inch _ SilverWhen new investors download a millennial-focused investing app, they are greeted with a sleek interface and a gentle introduction into how the product works, with no technical charts or numbers in sight. Instead of selling them access to complicated, stress-inducing tools for self-directed investors, millennial-focused apps sell potential customers the hand-holding necessary to get on the path to achieve that success.

Visuals > words.

Millennials communicate with images, videos, emojis, GIFs etc: essentially everything except written words. They are more likely to engage with your product when you tell them a story through visuals. They don’t want to read an email telling them to set monthly contributions. However, if they see an interactive graph of the potential returns they could generate, they may actually contribute.

Don’t make them call

1i65YBa7While their parents prefer to pick up the phone, millennials prefer to connect with brands on social media, messaging platforms, and through mobile apps. If you force them to call, talk to a robot, and wait through elevator music for customer service, you’re already doing it wrong. And if you don’t actively engage with your existing and potential customers in their preferred digital spaces, you shouldn’t expect to win their loyalty.

Tweet like their friends, not their grandparents

Once you’ve penetrated your customers’ favorite digital spaces, content always trumps promotion. Millennials are notoriously averse to blatant product-pushing tactics, and much more receptive to content-based marketing. In our survey of incumbent vs startup brokers, startup’s tweets gained 200X the engagements per follower, with jokes, rhymes, and other tweets that only broadly relate to their products.

Ads are annoying, but content drives sales.

Many incumbents, on the other hand, are still tweeting thinly-veiled invitations to open an account or check out their latest stock screening tools. To build loyalty with young people, incumbents should cut the try-hard tactics and create great content. When you make your audience giggle at a tweet, or gasp at a blog post, you create true, lasting value through social media. Otherwise, you’re just another ad to scroll past.

500% Confidence in Mobile First

For several years, digital companies and their executives have praised the “mobile first” strategy: start with a product that works well on a 4” screen, and it won’t be hard to make it work on a full-size computer. Try building your product mobile second, and you’ll be compressing an entire desktop interface into a fraction of its original size, hoping not to lose frustrated users in the process.

When we first launched TradeIt, we were lured by incumbent investing brands to build desktop solutions while we continued to have a mobile strategy. After almost a year of activity, we no longer dedicate resources or time to custom desktop solutions. Instead, we’ve sharpened our focus on mobile apps, messaging platforms, and AI & bot solutions. These three factors drove this decision:

  1. User Behavior
  2. Security & Trust
  3. False Profits

1. User Behavior

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Source: Mary Meeker’s Internet Trends Report, 2016

People spend 60% of their digital time on mobile devices, and this stake is only increasing as mobile continues to replace desktops for investing information. As we illustrated in the changing eco-system, many incumbent brands are maintaining legacy websites and ignoring the massive mobile opportunity under their noses. The agile competitors are building user-friendly mobile apps and chatbots that leverage behavioral analytics to constantly keep their users engaged. As a result, they’ve captured a valuable user base with high household income and high levels of education, while incumbent sites lose sticky & valuable users.

Screen Shot 2016-06-26 at 2.29.39 PMTradeIt’s mobile partners see 800 times more conversions to order than their desktop counterparts. Mobile users tend to be hyper sticky, so when they browse an investment app, they browse with intent to trade. The average order size is 500% higher on mobile than it is on desktop, so you could say we are 500% confident in mobile trading.

2. Security

In the early days of building one of the larger investing sites, the team spent countless hours trying to solve for “desktop security” with large financial institutions. As desktop became ubiquitous, the security risks increased, and users became trained to be skeptical of online security, prompting them to navigate to their financial institutions via advertising “buttons,” bookmarks, search and icons.

appletouch_bg2Mobile has superior verification technologies that allow app publishers to create secure and convenient experiences that incorporate users’ financial information. As we wrote about previously, native mobile apps are vetted by Apple or Google, smartphones require a password log in, and apps can enable TouchID in addition to existing credential requirements. There are 4 lines of defense for security when using a smartphone for consuming financial institution information in publisher apps- that is 4 more lines of defense than a desktop browser.

3. False Profits:

A common rule of thumb is that a business’ value is based on its capacity to generate future profits. Desktop profits are a shrinking, and most sites talk about harvesting. While investors are already migrating to mobile for investing news & information, financial service marketers have not caught up, and still spend disproportionately on legacy media. Changing user behaviors essentially guarantee that desktop ad performance will continue to decline, leaving financial publishers searching for replacement dollars.

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Source: Mary Meeker’s Internet Trends Report, 2016

As a result of the ad-spend disparity, publishers struggle to financially support their mobile investment products, which are growing at top speed while their desktop traffic remains stagnant. Financial advertisers will need to find the apps that have captured the mobile generation of engaged users, which entails partnering with a fragmented list of partners. With only 10% of financial advertisers budgets dedicated to mobile, the mobile ad opportunity is open for business. As one client told us, “mobile is table stakes” at this point, and financial marketers shouldn’t plan on arriving late.

Why the title “False Profits?” Today’s desktop ad spend is not sustainable. Users spend their time on mobile, so that is where the true value lies for advertisers. Through mobile ad partnerships with first movers, we’ve seen mobile produce strong returns on ad dollars. The mobile ad opportunity is huge, and we would rather be early to the mobile blastoff than shower in desktop’s false profits, before the dollars inevitably dry up.

TradeIt will continue to offer self-serve desktop solutions on our developer site, but our team is focused & dedicated to building great retail investing infrastructure for mobile, messaging and AI. Our metrics and measurements have spoken, and mobile first is the best route forward.

 

Fintech News: June 24th, 2016

E*Trade study reveals what investors want from mobile services (Finextra)

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Source: E*Trade Insights

Experienced investors have continuously evolving mobile preferences. Key findings from E*Trade’s study released this week:

  • Mobile trading is trending upwards. Total mobile trades mobile options trades increased 24% and 41%, respectively, since last year.
  • 2 out of 3 investors believe mobile is critical to monitor their investments.
  • 57% of millennials place orders on their smartphone or tablet, and 65% use their smartphone to research new investments.

See the full report at E*Trade Insights.

Britain Votes to Leave EU; Cameron Plans to Step Down (The New York Times)

It is too soon to say how the Brexit will affect London’s fintech hub. Some fintech CEOs have praised the Brexit as a way to escape bureaucracy and regulations that stifle innovation. Others have warned that these benefits will be outweighed by the difficulty of recruiting engineers, many of whom hail from Eastern Europe.

The Rise of FinTech in Supply Chains (Harvard Business Review)

FinTechs are climbing the supply chain and making it easier for buyers and suppliers to do business. By allowing the buyer to extend its payables, while also speeding up the payment to the supplier, these fintechs grant both parties more liquidity and stability in the timing of payments. These are likely companies you have never heard of, a group of many B2Bs in fintech who are truly disrupting the back offices.

CN-perfect-hand-off-Horiz-en

Fundings & Acquisitions:

Lots of money flowing this week, including huge funding rounds from European neo-bank Number26 and aggregation software Plaid. Two stock gift-card suppliers merged, and robo-advisor Personal Capital hired a former Yodlee exec.

stockpiletrioNumber26 raises another $40 million for its vision for the future of banking (TechCrunch)

Plaid Raises $44 Million to Allow Fintech Startups Access to Customer Data (Finance Magnates)

Stock Gifting Platform Stockpile Acquires SparkGift (Finovate)

Personal Capital Brings on Former Yodlee CFO (Finovate)

Micro-investors, beware of macro fees

“Set it and forget it” mobile apps are a great way to dip your toe into the stock market, until you read the fine print.

Recently, micro-investing has taken off as young investors sign up for “set it and forget it” apps. These apps have generated buzz and panic in the financial services industry. Last month, they attracted the scrutiny of JP Morgan’s CEO, Jamie Dimon (so they must be doing something right.) They claim to democratize the investment industry by allowing young people to “invest with $5” or “invest the change” from their purchases into a portfolio of exchange traded funds, or ETFs.

Low Balances, High Fees

Screen Shot 2016-06-17 at 12.05.09 PMIn practice, small-time micro investors pay more than double the fees of traditional investment vehicles. There may be no account minimum, but the smaller account holders get ripped off in the end. How is this? For small accounts, micro-investing apps charge a flat $1.00 per month for their service, which doesn’t sound like much to an inexperienced investor. However, for an account with just a few hundred dollars in assets, $12 per year amounts to a 4% fee, a higher percentage fee than most financial advisors or even hedge funds.

Over five years, if a budding investor deposits $50 each month into a micro-investing app, the monthly $1.00 fee will eat up 12% of their returns, compared to an ETF portfolio from a traditional brokerage. Depositing less than $50 each month? That monthly buck will swallow even more of your potential returns.

Hate fees? Try DIY

If you have an account balance around $2,500, $1.00 per month only amounts to a fee of .5%. However, at that point you have enough investable assets to open an account at a traditional brokerage. Then, you can construct your own portfolio of diversified ETFs for free. You’ll also have access to research & education tools, real humans to call or email, and you’ll learn how to research your holdings for a lifetime of responsible investing. Essentially, if you have enough assets to make a $1 monthly fee sound reasonable, then you have enough to invest through a reputable broker who can help you achieve your financial goals.

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Most ETF issuers offer free portfolio generators. Source: iShares

With a Fidelity brokerage account, clients can trade iShares ETFs commission-free. Open a Fidelity account, use iShares’ free portfolio generator, and you’ve got a portfolio of $ITOT, $IXUS, $IUSB, and $IAGG without paying a penny in fees. Similarly, TD Ameritrade offers over 100 commission-free ETFs from SPDRs, Vanguard and more. Go to Vanguard’s ETF recommendation engine and you can build an ETF portfolio with the lowest expense-ratios on the market, at no commission from TD.

The Future of Micro-investing

Charging high fees for low balances is unfair at best, and predatory at worst. Still, micro-investing products have done an excellent job getting young people “over the hump” and making their first investment. Rebuilding trust with this generation, who grew up during the financial crisis, is nothing to scoff at, and neither is a user-friendly mobile interface.

Traditional brokers should mimic what micro-investing apps have done right, as many of them already did with robo-advisors last year. By adding micro-investing solutions to their more profitable wealth management offerings, incumbent brokers can gain loyal young customers today. When these customers develop more complicated needs, their brokers will inherit a massive cross-sell opportunity.

Fintech News: June 17th, 2016

Why Passive Investing Increases Corporate Activism (Knowledge @ Wharton)

Many market observers have assumed that passive investing decreases pressures on individual CEOs or board members to produce real change in their companies. However, a recent study found the opposite: since funds are stuck with certain stocks, fund investors have extra incentive to improve those companies, compared to active investors who can simply drop any investment in a poorly run firm.

The Blackrock tale told in the UK: ETFs & Robo-advisors (Daily Fintech)

roboIn the US, 50% of ETF volume is from retail. In Europe, it is only 5%. European robo-advisors are lagging their US counterparts in AUM, customers, revenues, but is it an emerging opportunity or a dead-end to chase the European market?

Five factors that differentiate Africa’s fintech (CNBC Africa)

africa_origami_01.jpgUnlike North American and European fintech, African fintech has no established financial services to “disrupt.” Instead, they’re building an entirely new infrastructure from scratch. 80% of the continent has no access to financial services. The desktop market never developed; the mobile market is coming first, and big data is a bigger deal.

The Wealth Management Relationship: The Data or the Advisor? (Finance Magnates)

As wealth continues to move towards younger, tech-savvy hands, the debate continues: are human advisory firms becoming irrelevant? Robo-advisors are betting that data is important enough to replace humans, but might need to spend more time thinking about how to leverage their data for decisions.

Fintech News: June 10th, 2016

E-Trade plays its cards in evolving automated investment space (TechCrunch)

adaptive-portfolios-screen_2E*Trade has launched Adaptive Portfolio, following its fellow incumbent brokerages who built their own robo-advisors. One important difference: Adaptive Portfolios combines both active and passive investing strategies, shifting its level of risk depending on market conditions. Adaptive Portfolio includes access to financial consultants, requires a minimum deposit of $10,000 and charges .3% in fees.

Wells Fargo’s Bid to Vanquish Screen Scraping (American Banker)

API_PAGE_CLOUD_-_cropWells Fargo has developed an API that eliminates the need for screen scraping, an outdated technology that copies and pastes financial information from one page to another. This is part of a larger push toward APIs, which avoid all of the security problems of screen-scraping, such as the inability to use 2-factor authentication.

UK broker to launch trading on Facebook app (Finextra)

Could social go financial? AJ Bell, a UK stockbroker, has launched a chatbot to allow its customers to access their accounts and place trades through facebook messenger. This is part of a larger trend of integrating third party services into Facebook’s platform, something that has been commonplace for Asian apps for years. See the first facebook trade ever placed here.

The fintech world beyond Silicon Valley and Europe: Emerging market contenders (TechCrunch)

BRIC-countriesWith unique local legislation playing a key role, fintech abroad is not just a simple replication of proven Western successes. Many countries have structural macroeconomic differences, little or no existing infrastructure, and unique problems to solve. Here is a survey of emerging fintechs outside of North America and Europe, from BRIC countries to East Africa.

Mary Meeker’s 2016 Internet Trends: Fintech Takeaways

From Mary Meeker’s 2016 Internet Trends Report, here are the top 5 digital trends that the fintech industry can’t afford to miss.

In the last few years, fintechs have gained an edge over traditional financial services firms by rethinking what it means to obtain and connect with their clients. For some consumer-focused fintechs, innovations in marketing, branding and customer service have been just as important as advances in the underlying product. But regardless of product, all financial service providers have extremely high customer lifetime values. As such, they spend a proportionate amount of money to obtain new clients through marketing and advertising.

Even after the customer “hook,” fintech firms must keep their existing clients engaged and satisfied with a top-notch product. Otherwise, they risk losing them to the more tech-savvy competition. Product slip-ups are expensive, so staying up to speed in the digital landscape is a top priority. Here are the top digital trends for fintech to look out for in 2016:

1. Advertisers need to go mobile.

Screen Shot 2016-06-06 at 4.44.47 PM.pngAdvertisers still spend disproportionately on legacy media, such as print and TV, even as the amount of time spent on these platforms plummets. Today, mobile devices represent just 12% of industry ad spend, even though they usurp 25% of all time spent across media, and this number continues to grow as Gen Y rejects the TV and desktop in favor of their smartphones. The mobile ad spend opportunity represents $22 billion in the United States alone.

2. Text is out, images and videos are in.

More so than ever, a picture is worth a thousand words. Generation Z communicates primarily in images and videos, not text. These are the kids who grew up with emojis and GIFs. As social networks like Snapchat and Facebook move towards video-centric product experiences, their audiences begin to expect the same effortless product experience elsewhere, and fintechs will need to adjust their products to be more audiovisual, and less text heavy.

3. Voice is a new form of UX.

Screen Shot 2016-06-06 at 4.57.44 PM.pngAcross generations, voice commands are becoming more prevalent than text commands. In fact, by 2020, voice and image searches will surpass text searches. Humans can speak 150 words per minute, but can only type 40. With machine learning, tone recognition, and other budding technologies, voice interface will become something we use all of the time. In fintech, voice technology brings about new opportunities for solutions in cyber security, behavioral science, and will change the meaning of UX design to something more audio-focused than visual.

4. Messaging apps are becoming commerce & services platforms.

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While older generations prefer to contact businesses on the phone, Generation Z “can’t even” wait on hold, and prefers to communicate with businesses through social media and messaging apps. For financial institutions, there is an urgent need to integrate their product into messengers to keep their young clients engaged, without forcing them to pick up the phone.

5. Privacy matters to consumers.

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In 2015, 74% of internet users limited their online activity due to privacy concerns. Among top privacy concerns were how they get user data, and what they do with it. After the 2008 financial crisis, trust in financial institutions reached an all-time low. With the recent backlash from JP Morgan against startups that collect user data, it’s clear that data privacy is a hot topic this year. By understanding their customers’ privacy worries, fintechs can tailor their messaging and communication strategy to retain their customers’ trust and privacy.

Fintech News: June 3rd, 2016

The largest crowdfunding effort in history is built on bitcoin’s rival currency, Snapchat enters fintech, optimizing your product for lazy consumers, and reducing fraud rates with mobile devices. Here are the big fintech stories this week.

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