Investment Platforms Are Racing to Meet the Modern Investor's Needs

Justin Zacks, VP of Strategy at Moomoo Technologies Inc.

Technological innovation has put a myriad of trading and analytics tools once reserved for professional investors in the hands of retail traders. But just like upgrading from a Toyota to a Ferrari, not everyone is and can be ready to put the pedal to the metal from the get-go.

In today’s ‘on-demand’ society, investors want everything right away. This is making things more difficult for investment platforms. Instant account opening and trade settlement are now technologically possible, but adoption takes time due to operational logistics. For example, stock trades still take two business days to settle, but this will be moving to one business day in 2024. Same day settlement is likely inevitable.

These developments can also take time as regulators take a cautious approach. 

There is value in staying in one’s lane and obeying the speed limit, for platforms and investors alike. Educational courses that teach new investors how to use trading features,  while also explaining risks are just as important as the tools themselves.

Are retail investors getting the innovation they want?

Technology and innovation among the top retail trading platforms differ based on the types of investors they cater to. Many advanced investors who conduct large transactions want real-time data and welcome automating the trading process. For example, platforms may turn to algorithms that break large trades into smaller ones, making them less noticeable to other market participants. This is the type of innovation that could benefit many experienced, high-volume traders. 

"A user interface that is accessible to beginners is one-way platforms are differentiating themselves"

On the other hand, platforms focused on smaller traders may use technology that enables them to offer trading in fractional shares and features such as no-account minimums and no or low commissions, a potential benefit for traders with smaller assets. 

Technology plays an important role in making trading and analysis for both types of investors easier to understand. A user interface that is accessible to beginners is one way platforms differentiate themselves. The platform’s interface may not be as important to more seasoned investors.

Technology is also being used to customize the investor experience from portfolios, watchlists and beyond, and each broker offers a unique set of customization tools.

What does the future hold?

Much of the innovation is focused on providing new and better analysis tools and more information, faster. This has resulted in a more level playing field between retail and professional traders. With zero commissions now an industry norm, online brokerages are using technology to gain a competitive edge and differentiate themselves. However, a myriad of new products and features enabled by innovation within the industry can lead to information overload. 

The next level of innovation will be focused on using technology to match the investor experience on the platform to their skill level and trading interests. Technological advancements cannot make decisions for investors, rather, they will be used to help improve trading decisions through a better understanding of risk. 

Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. 

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