Originally Published on Technavio | Security Brokerage And Stock Exchange Services Market by Channel, Type and Geography - Forecast and Analysis 2023-2027
Anticipated to burgeon at an estimated Compound Annual Growth Rate (CAGR) of 8.92% between 2022 and 2027, the security brokerage and stock exchange services market is poised to witness a remarkable increase, contributing to a forecasted growth of USD 690.6 billion. The market's upward trajectory hinges on diverse factors, including the escalating demand for Exchange-Traded Funds (ETFs), the burgeoning desire for investment avenues, and the surging popularity of social trading.
Market Overview:
This detailed report on the security brokerage and stock exchange services market provides a comprehensive analysis, delving into market segmentation by channel (offline and online), type (derivatives and commodities brokerage, equities brokerage, bonds brokerage, stock exchanges, and others), and geography (North America, APAC, Europe, Middle East and Africa, and South America). In addition, it includes an extensive exploration of drivers, trends, challenges, and integrates historical market data from 2017 to 2021.
Key Market Drivers and Trends:
The primary driver steering global security brokerage and stock exchange services market growth is the escalating demand for investment opportunities. The quest for enhanced capital is fueled by shifting economic conditions, resulting in low-interest rates and a limited array of traditional investment avenues. Noteworthy investment options include stocks, bonds, mutual funds, real estate, and certificates of deposit (CDs). Investors are drawn to the potential capital growth offered by real estate investments and the security of CDs, making these viable long-term options. The report highlights the pivotal role of these factors in propelling market growth during the forecast period.
Emerging Trends in Robo-Advisory:
A significant trend shaping the market landscape is the increasing adoption of robo-advisors for managing investment portfolios. Robo-advisors, powered by computer algorithms and artificial intelligence, offer automated investment recommendations and portfolio management sans human intervention. The rising popularity of robo-advisors can be attributed to lower fees compared to traditional financial advisors, allowing investors to save on management fees, commissions, and other charges. Investors also benefit from greater control, transparency, and customization of investment portfolios, all facilitated by robo-advisors' integration of big data and machine learning algorithms. These trends collectively contribute to the expected growth of the global security brokerage and stock exchange services market.
Challenges in Regulatory Compliance:
The market grapples with a significant challenge - the surge in regulatory compliance with trading. While aimed at ensuring the integrity, transparency, and fairness of the trading system, stringent regulations impose considerable burdens on the global securities brokerage and exchange services market. Compliance requires intricate and costly procedures, including staff hiring, technology investments, and ongoing training to navigate evolving regulations. This amplifies expenses, impacting the profitability and sustainability of brokerage firms and stock exchanges during the forecast period.
Customer Landscape and Key Companies:
The report incorporates a comprehensive view of the market's adoption lifecycle, covering stages from innovators to laggards, with a focus on adoption rates in diverse regions. Key purchase criteria and drivers of price sensitivity are analyzed to aid companies in refining growth strategies. Major companies in the security brokerage and stock exchange services market, such as Ameriprise Financial Inc., Bank of America Corp., and Euronext N.V., are implementing varied strategies - from strategic alliances to product launches - to enhance their market presence.
Segmentation Insights:
The offline segment is poised for significant growth during the forecast period, attributed to its advantages, including personalized guidance and negotiation capabilities, not always feasible in online trading. Offline trading allows investors to access a range of investment opportunities, including shares, bonds, and mutual funds. The offline segment's growth is further fueled by the ability to negotiate security prices, leading to better returns for investors with skillful brokers guiding their decisions. Brokerages supplement this by offering comprehensive research and analysis tools, enabling investors to make informed decisions and customize their investment portfolios.
Regional Contributions and Insights:
North America is projected to contribute a substantial 35% to the global market growth. The robust financial industry, advanced infrastructure, and highly skilled workforce make North America an attractive destination for investors and businesses. Renowned stock exchanges in the region, such as the New York Stock Exchange (NYSE) and NASDAQ, further bolster market growth. Despite initial challenges posed by the COVID-19 pandemic in 2022, the initiation of vaccination drives in 2021 led to industry reopening, particularly in offline trading platforms, boosting investor confidence. This resurgence is anticipated to propel the growth of the regional security brokerage and stock exchange services market.
Segment Overview and Parent Market Analysis:
The report presents a forecast of market growth by revenue at global, regional, and country levels, along with an analysis of the latest trends and growth opportunities from 2017 to 2027. It categorizes the market within the globally diversified consumer services market, covering revenue generated by consumer service providers. This broader market encompasses residential services, home security services, legal services, personal services, and more. The parent market analysis extensively covers external factors influencing growth during the forecast period.
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