Online stock trading is set to rocket in Europe, with the number of accounts expected to grow from 1.85 million at the end of 1999 to 4.4 million by the end of this year, according to figures from research group IDC.
By 2003 16.8 million trading accounts are expected in Europe.
‘Europe is now in the stage of rapid online trading account growth,’ said Luisa Bordoni, vice president of IDC’s European Vertical Market Research. ‘During this take-up phase, brokers must focus on surviving by gaining enough market share to become sustainable players.’
IDC said lessons should be learned from expansion in the U.S. market where many firms have struggled to keep up with immense growth and competition.
‘Companies that are first off the block can gain significant market share at this stage of rapid market growth and the biggest challenge could well come from start-ups rather than from traditional institutions,’ Bordoni warned.
‘To date, online brokers have competed on price, although as the market develops and competition intensifies, they will focus on offering value-added services such as research and information, either as a service offered directly or through partnership. Some are also likely to integrate other services, both financial and non-financial.’
The UK online trading market, however, has been surprisingly slow to develop, according to IDC, although the largest number of European online brokers are situated in the UK.
The company says this may be partly due to early UK enthusiasm for Internet technology, helped by a common language with the United States and the infiltration by the large U.S. discount brokers, most of whom see the United Kingdom as the most popular point of entry into Europe.
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