We are now at the apex of a new period of unprecedented opportunities for the online financial industry. The economy is about to open up a large space for us to grow. History has revealed that after recessions, new ‘windows of opportunity’ open up where new industries grow and become established.
In a report published in December 2010, LeapRate estimated that the online Forex trading volume was some $200 billion daily, barely 5% of the total world foreign exchange market (this is the largest market in the world, with an average daily turnover estimated at $3.98 trillion). This represents enormous growth if we compare it to the figure of under $10 billion that was traded online daily 10 years ago. If the LeapRate numbers are correct, daily online Forex operations are already more than double those of the New York Stock Exchange and some 40 times that of the Ibex in Spain.
For this reason, in 2011 and in the next several years, we will see significant ‘organic’ growth in the online trading industry. This is definitely why internet users will continue running across online advertising banners, as they are found on almost all the main finance, economic and news sites today. PPC ads will also continue to grow, offering free demo accounts when doing searches with Google. While the industry continues growing at this pace, this type of advertising will continue to provide good results.
In light of this growth panorama, the easiest short-term marketing initiative for brokers would be to raffle a Porsche and cut prices. However, although this may attract a lot of new clients, they are actually attracted to the idea of winning a car. Furthermore, they would probably be clients who didn’t know how to trade and are more likely to burn their money fast and lose it quickly, and hence it wouldn’t be a sustainable strategy.
The future will belong to the banks that have a client focus; banks that manage to be the best when attracting and making their target clients loyal by value-added offers that let them obtain sustainable, scalable and profitable development.
The key will continue to be to offer a superior and unique brand, which must be based on two main ingredients, in addition to superior service that will often include high-quality contents and participation on social networks: trust and superior technology. There is space for growth and differentiation today for new players. Indeed, the best thing that could happen to the industry for its growth would be for one of the largest Latin American banks to enter and do mass marketing for CFDs and Forex. It wouldn’t surprise me if this happened, as we have recently seen the entry of large banks like Citibank (CitiFX) and even the entry of companies from other industries like Microsoft (MSN Trader).
Our objective at Saxo Bank is to continue offering the best trading experience. For this, we want to facilitate innovation processes based on the genuine needs of our clients. We believe that the opinions of our institutional clients will be increasingly important to attain our objective and differentiate between ‘good’ offers and ‘other’ offers. Institutional clients are much more demanding when selecting a distributor and less liable to be influenced by mere advertising.
For this reason, we have focused on doing what we know how to do best, which is developing our platform and providing them to our institutional clients, banks and brokers so that they in turn can offer specialised local services for the different needs of their clients. At present and in the future, particularly in the financial industry, trust is the most important thing for a brand. People no longer trust the institutions in which they used to place their trust… People no longer trust in the government they select, the banks they chose, the food they eat or the marketing communications they receive. Due to this, the top priority of a leading brand is to offer reliability, security, believability… in a nutshell, trust. As one of my most important mentors -Larry Light, the CEO of Arcature- would say, our responsibility will continue to consist on ‘creating brands that can promise and deliver a relevant and differentiated experience through its services, agreements and products’.
In order to increase customer quotas in your sector, learning and education are undoubtedly essential. Do you provide this training and education via new technologies or in person?
Offering training and education is indeed key in our industry and there is a large demand from our clients, demo users and potential clients for educational content about how our platforms operate and about our products such as CFDs, Forex, options, etc. Via www.saladeinversion.es, Saxo Bank shows its commitment to online learning, as it is very scalable and offers users the chance to access materials whenever and wherever they are. However, personal training continues to be fundamental. Due to this, we trust in our institutional alliances at Saxo Bank, which provide in-house and local training that is competitive and personalised to our target clients.
What is more valuable to invest in advertising, technology or contents for your website?
It is more valuable to invest, where the greatest added value is for our clients. This can be known by a simple equation: ‘The total value of the brand experience, divided by the total costs.’
In our case, technology is very important, as we have to always be at the vanguard of the industry when it comes to online trading platforms so that our white label clients, introducing brokers and private clients can continue offering and obtaining the very best trading experiences. For this reason Saxo Bank decided to buy Initto last year, a company whose objective is to be the most efficient provider of computer and technological developments on the market. Innito is present in India, the Ukraine and Scandinavia. In addition to Initto, the latin marketing department has obtained an important partner for developing online technological communications, the Company Oneline Centric headed by Nelson Pires.
Content takes the second place in priority, as they offer added value to end users, and help as well in creating awareness about our products and attracting new clients. However, remember that content is not a marketing objective but rather a medium. Finally and in third place is advertising, as its sole objective is to present the product and communicate our brand values.
Go to other sections of the interview:
1. The keys to success in online marketing & brand management in the in the Financial Service Industry click here
2. Saxo Bank pioneering financial entity with regards to social networks in Spain and Latin America click here
3. The launch of Trading Floor, Sala de Inversion and its Search Engine Optimization Strategy click here
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