Online Trading Platform Market Size, Share & COVID-19 Impact Analysis, By Component (Solution and Services), By End-Users (Banking and Financial Institutions, Brokers and Others), and Regional Forecast, 2021-2028

The global online trading platform market size was USD 8.28 billion in 2020 and is projected to grow from USD 8.59 billion in 2021 to USD 12.16 billion in 2028, exhibiting a CAGR of 5.1% during the 2021-2028 period. Based on our research, the global market exhibited a substantial growth of 3.7% in 2020, as compared to the average year-on-year growth during 2017-2019. The impact of COVID-19 in the market has been exceptional and surprising, with trading platform components witnessing a diverse demand across the region during the pandemic.

An online platform for trading is a software platform used to monitor live market prices and accordingly assist the user in performing the activity of buying and selling as well as holding the stock options. Trading platforms include services, such as trading in bonds, international currencies, stocks (shares), and other financial trade tools. The online platform solutions for trading assists banks, traders, and individual brokers evaluate the financial market opportunities and eliminate risk factors.

The increasing demand for the customized trading platform from end-users, such as government and non-profitable banks, is anticipated to drive the demand for these solutions. Technological advancements and integrating trading platforms on smartphones are few major factors expected to create various market opportunities for key players. Also, companies in the market are focused on expanding their business units across the globe. For instance,

• In February 2021, Plus500, an online trading platform provider based in the United Kingdom, announced its venture in North America as an expansion strategy. The company aims to expand its business units in new geographic regions.

COVID-19 Impact

Online Trade Set to Plunge as COVID-19 Pandemic Upends the Global Economy

The ongoing pandemic has been triggering social stress and leading to economic disruptions across the world. With the closure of production facilities and manufacturing units around the globe, the unemployment rate has increased in countries. These outburst effects of COVID-19 are leading countries, as well as the global economy towards recession. As the COVID-19 pandemic continues, it has posed an exceptional challenge for an individual to spend over an online trading platform.

The World Trade Organization (WTO) forecasts a drop in foreign trade between 13% and 32% during the pandemic. The extraordinary magnitude of this health problem, low income, and reduced resources explain the vast variety of possible outcomes. Most trade data may not yet show the effect of the pandemic on foreign trade, although some timely and leading indicators have predicted the scale of the recession and how it relates to the previous crises.

• The S&P 500 index dropped around 20% in just over three weeks and then dropped another 30% in a record 30 days.


• The Euro STOXX 50 index fell at its fastest pace in history.


• Similarly, from February 20 to March 9, the 10-year United States Treasury note yield declined from 1.52% to 0.54%.

Based on the pre-pandemic growth projections, in 2020, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) predicts that Asia Pacific would lose around USD 2.2 trillion in trade. The pandemic has impacted trade services and has dropped foreign investment.

LATEST TRENDS

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Integration of Chatbots with Trading Platforms to be an Emerging Trend

The integration of AI-based chatbots services with electronic trading platform solutions is considered as one of the emerging trends for the growth of the market. Chatbots offer users services, such as generic FAQs, increasing access to real-time estimates, account reports, information about the active trader's notifications, and market estimations.

Online trading platforms based on AI chatbots offer users custom-made information over one-to-one communication channels and assist in analyzing the key data points of traders and users. Also, chatbots can initiate and close online trading. Key players in the market are aiming to develop advanced online trading platforms based on AI chatbots.

• For instance, in June 2020, Reliance Industries Limited introduced AI chatbot to assist shareholders in the trading market. Trading platforms integrated with chatbots assist users in remaining up-to-date with market trends, mathematical calculations, and predictions, automate routine trading tasks, and others.

DRIVING FACTORS

Artificial Intelligence Powered Market Insights to Drive the Adoption of Trading Platforms

Artificial Intelligence (AI) is expected to transform the future of these trading platforms. Companies are deploying AI in their trading platforms in the form of robo-advisors. The platform enabled with AI technology assists users to observe millions of trading data pointers and execute practices at an optimal price. The platform also enables analysts to study the market with high precision and helps trading firms efficiently mitigate risks to provide higher returns. Some of the companies that have implemented AI and its applications with their trading platforms include:

• Tracxn Technologies (Epoque Plus)- Epoque’s completely automated AI trading comprises three engines powered by AI, including a strategy engine that analyses potential trades; an order engine that performs operational actions; and an active engine that uses machine learning to improve its performance.


• Kavout Corporation, Seattle Washington – Kavout, an AI platform, uses predictive analytics, big data, and machine learning, coupled with the company’s Kai quantitative analysis model. The platform helps traders and users to identify potential short-term winners and losers in the stock market.

RESTRAINING FACTORS

Stringent Rules and Regulations to Impede the Adoption of Online Trading Platform

Online trading software businesses are extensively regulated by government rules, foreign regulatory agencies, self-regulatory organizations, and numerous exchanges. Vendors must comply with regulatory and compliance functions. Similarly, to conduct customer activities, these vendors are obliged under certain rules mandated by primary regulators. Hence, the inability to do so may result in penalties to the vendor.  The lack of awareness about the solutions across developing nations may hamper the online trading platform market growth in the near future.

SEGMENTATION

By Component Analysis

High Demand for Customized Trading Platforms from Brokers to Boost Solutions Segment

Based on the component, the market has been bifurcated into solutions and services. Among them, the solutions segment is predicted to grasp the largest online trading platform market share during the estimated period. The growth is due to the increasing demand for customized trading platform solutions among online brokers and trading firms.

The services segment is expected to grow substantially during the forecast period (2021-2028). The adoption of media devices, social media platforms, and mobile app trading platform services is expected to boost the growth of the services segment.

By End-users Analysis

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Rising Demand for Cloud-based Trading Solutions Will Support the Brokers Segment

Based on end-users, this market is distributed into banking and financial institutions, brokers, and others. The banking and financial institutions segment is probable to dominate the market during the forecast period. The segment's growth is mainly due to the surging adoption of customer-made trading software deployment across banking and financial institutions.

• For instance, in January 2021, Deutsche Bank integrated with Sharekhan Ltd. to develop and launch db TradePro, an online trading platform. The trading platform offers users services, such as interactive account options, competitive brokerage rates, effective research, and online banking services.

The broker segment is projected to display a significant growth rate during the projection period. This is attributable to the escalating implementation of cloud-based trading solutions across broker firms to advance an in-depth analysis of threats and lessening complexity.

REGIONAL INSIGHTS

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Geographically, the market is divided across five major regions, namely, North America, Asia Pacific, Europe, South America, and the Middle East & Africa.

North America is expected to dominate the market during the forecast period. The growth in the region is mainly owing to the presence of major players, such as EffectiveSoft Ltd., ETNA, Artezio LLC., Chetu Inc., TD Ameritrade Holding Corporation, and others. Also, key players in the market are planning to expand their business presence globally. For instance,

• 2020 – EffectiveSoft Ltd., a U.S.-based company, expanded its business units and development centers in Eastern Europe. The geographic expansion is competed to offer competitive outsourcing software development services across European countries.

Europe is expected to grow with a significant CAGR during the forecast period (2021-2028). Private banking institutions in countries such as France, Germany, Italy, Spain, Benelux, and others, are highly investing in adopting electronic trading platform solutions. Key players in the market are planning to develop an advanced trading platform. For instance,

• In January 2021, Binomo launched an online trading platform based on real-time analysis and forecasting. The platform consists of around ~900,000 brokers from over 130 countries.

The growth in the online trading platform industry across South America and the Middle East, and Africa (MEA) is projected to exhibit stable growth. Companies in these regions have started focusing on developing trading platform solutions for the diverse banking and financial industries.

Asia Pacific is amongst the fastest-growing regions in the market. Banking and financial institutions in countries such as China, Japan, India, Oceania, South Korea, and Southeast Asia are increasing their investments to adopt customized trading platforms solutions. These countries have a wide number of providers of electronic trading platform solutions and services. Governments and enterprises in countries such as Japan, South Korea, and Oceania are also encouraging the adoption of cryptocurrency. The adoption of cryptocurrency would assist in creating various market opportunities for key players in the upcoming years.

KEY INDUSTRY PLAYERS

Key Players Develop Innovative Trading Platform Solutions to Strengthen their Positions

The competitive landscape of this industry is moderately fragmented with the presence of well-known brands, along with some regional and local players. TD Ameritrade Holding Corporation, trade interactive brokers, E-TRADE, Chetu Inc., Ally Financial Inc., Merrill Edge, and Plus500 are the prominent players in the global market. In addition, key players in the market are deploying trading platform solutions with advanced technologies, such as AI, cloud, and others, to advance their products and offer cutting-edge solutions. They aim at high investments in R&D, mergers & acquisitions, and enhanced procurement processes in the case of software services.

• October 2020 – The Charles Schwab Corporation acquired TD Ameritrade Holding Corporation, which provides enhanced trading platform solutions and services in the investment industry.

LIST OF KEY COMPANIES PROFILED:

• Td Ameritrade Holding Corporation (Nebraska, United States)


• Interactive brokers (Connecticut, United States)


• E-TRADE (Virginia, United States)


• Profile Software (London, United Kingdom)


• Chetu Inc. (Florida, United States)


• Empirica (Dolnośląskie, Poland)


• Pragmatic Coder (Krakow, Poland)


• EffectiveSoft Ltd. (California, United States)


• Rademade Technologies (Tallinn, Estonia)


• Devexperts LLC (Munich, Germany)

KEY INDUSTRY DEVELOPMENTS:

• July 2020 – E-Trade launched an E-TRADE Equity Edge Online (EEO) Developer Platform. It is amongst the first API developer platforms.


• May 2020 – Devexperts LLC launched a DXtrade trading platform for CFD/FX brokers. It provides brokers back office settings and configurable client-facing layouts that allow brokers to minimize operational overheads via automation.

REPORT COVERAGE

An Infographic Representation of Online Trading Platform Market

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The online trading platform market research report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, product types, and leading product applications. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

Report Scope and Segmentation