In the past 12 months, the retail investor base in the capital market has increased by 28 per cent. With the rise of online trading platforms, investing has become more accessible to individuals. These platforms not only provide an easy and convenient way to trade, but they also offer a host of features and tools that help investors make informed decisions. Furthermore, these platforms can help investors to cut costs and save money, indirectly leading them to have more investable amounts.
Pricing Benefit
Zero-cost platforms offer a one-time cost and don’t charge any brokerage fee for each transaction. This pricing advantage is one of the biggest benefits for customers as it offers them immediate and tangible cost savings from day one. And savings are good for everyone, right?
Run on Superior Technology
It is often believed that low-cost platforms offer substandard technology. However, it is the other way around. For zero-cost platforms, it is crucial to provide a seamless and user-friendly experience to customers. If customers don’t have a good experience, it can make it harder for companies to get new customers through referrals which is otherwise a lucrative way to reduce acquisition costs. To prevent this, zero-cost platforms spend a lot of time and effort to make sure their customers have a seamless experience. This includes using advanced technology, such as artificial intelligence and machine learning algorithms, to personalise user experiences and optimise platform performance. The goal is to create a 'Wow' moment for customers, which can lead to positive word-of-mouth referrals and long-term profitability. Ultimately, a superior technology platform can help zero-cost platforms stand out in a crowded market and attract new customers.
Unbiased Business Model
Unlike other models where more transactions mean more earnings, zero-cost platforms do not benefit from increased transaction volumes. The key to success is increasing customer life cycle and satisfaction, as well as providing them with tailored solutions based on their needs. The longer a customer stays on the platform and the happier they are with their experience, the more likely they are to spread positive word-of-mouth referrals, which can lead to more customers and increased profitability. The platforms provide need based solutions/products to the customers. This aligns with the business and client goals, making it all about growth, longevity, satisfaction. As a result, zero-cost platforms prioritise customer satisfaction and aim to provide a high-quality service to ensure customer loyalty and retention. This unbiased business model ultimately benefits both the platform and the customers, creating a win-win situation for everyone involved.
Superior Customer Service
Superior customer service is the cornerstone of success for zero-cost transaction firms. As mentioned earlier, customer satisfaction is crucial to the success of these firms. Without happy customers, there can be no business growth. While this is true for all businesses, it is even more critical for low-cost business models. Zero-cost transaction firms prioritise their customers above everything else. They go above and beyond to ensure that their customers have a seamless and enjoyable experience on and off platform. This includes providing personalised support, offering quick and effective solutions to problems, and continuously seeking feedback to improve the platform. For zero-cost transaction firms, superior customer service is not just a nice-to-have, but a survival necessity. Customers can be rest assured that they will be valued more than anything else in a low-cost business, as they are the lifeblood of the platform’s success.
In conclusion, zero-cost platforms offer several real benefits, such as pricing advantage, superior technology, unbiased business model, innovation for survival, and superior customer service. These benefits help in attracting and retaining customers, which is crucial for business growth and profitability. Zero-cost platforms have disrupted the financial industry and have forced traditional brokers to rethink their business models. Therefore, investors can take advantage of these benefits and make informed investment decisions without worrying about brokerage fees.
The writer, Arun Chaudhry, is the CBO of Mirae Asset Capital Markets.
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