Online investing in Western Europe will grow by a compound annual growth rate of 10.5 per cent in the period from 2002 to 2007, according to the latest IDC forecasts. After the enthusiastic early years, the growth of European online trading accounts appears to have gradually slowed, heading toward a lower level of expansion in almost all European countries. According to IDC, this means that the e-investing market is becoming mature, making it an especially challenging area for all the players involved.
“The Western European financial sector is undergoing changes that are aimed at better exploiting the customer base by adding more value to the existing services and prompting more cost-effective channels,” said Mirko Corbetta, research analyst in IDC’s online financial services programme.
To understand how e-investing will evolve in the Western European financial services sector, IDC has evaluated different regional situations and leading players in order to calculate real market potential and its future evolution. IDC found that:
· Traditional brokers have caught up with pure online players; at least 90% of traditional brokers have a web site. However, by the end of 2002 the number of players that had reached profitability was still limited.
· Major constraints such as security concerns, capital market trends, and low confidence are limiting faster market growth. Low profitability is limiting marketing initiatives to attract new customers at a faster pace.
· New technologies and killer applications will have a restricted role in the evolution of e-investing, as the infrastructure and quality of the current online trading platform are already very advanced and provide consumers with access to high-performance products.