With online trading currently making up around 15-20% of retail activity in the UAE, the continued rise in the volume of brokerage activities will drive retail investors to migrate fully online in due time.
“Online activity is still relatively small in the UAE. In Saudi Arabia, 50% of retail brokerage takes place online, whereas in the US and other developed markets, over 80% of retail operates online. As the market continues to grow, many of the financial activities are bound to become predominantly technology based,” said Seif Fikry, Head of Brokerage at EFG-Hermes, which has recently rolled out online and call center services for brokerage.
In 2005, the UAE had an average daily value traded of AED1.69 billion, of which AED1.35 billion was attributed to Dubai. The market continues to be dominated by retail investors, in contrast to the more developed markets, which are largely made up of institutional investors.
“Retail investors are a fragmented group that requires different levels of flexibility to cater to. Offering online and call center services enables our customers the convenience and ease of brokering their deals at any time from whichever location,” said Fikry.
He added, “Upon entering the market a year and a half ago, we found that the stock exchanges and the regulator are very much encouraging this type of technological advancement for this business, and upon finalizing our infrastructure, the time was right to introduce these value added services.”