Europe E-Brokerages Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Europe E-Brokerages Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Europe E-Brokerages Market has generated a revenue of about 5.2 USD billion in the current year is poised to achieve a CAGR of about 8% over the forecast period.

Online brokerage is defined as the selling of securities (stocks, bonds, mutual funds, warrants, etc, etc.) on the Internet. The European brokerage market earlier used to be dominated by local banks that served their larger client base and operated using a brick-and-mortar business model initially. Later e-commerce business model was introduced by new age fintech companies by leveraging on the technology and offering services at a very competitive pricing structure. In the present day, both banks and e-brokers are leveraging technology and providing online trading platforms and services virtually. Structural growth drivers like raising fintech services penetration, increasing financial assets and changing investor behavior, and many other factors are driving the growth in the European online brokerage market. The market for online brokerage services in Europe is continually evolving and is intensely competitive. The retail brokerage industry has experienced significant consolidation which is expected to continue in the future and may increase competitive pressures in the industry.

Each country in Europe has a different style of investing and the number of trades executed per account in a year is also different from country to country. The dominant income model of brokerage firms in the Eurozone is based on trade commissions without active monetization of the bid/ask spreads and trading flow. This risk-averse model has mainly to do with regulatory scrutiny and customers that demand high cost transparency. In Europe, there are a number of international brokerage providers which operate with different business models. They tend to have no regional anchoring and often only offer exposure to the financial markets through derivatives such as CFDs without offering their customers the option of physical asset ownership. Due to the different core businesses of these brokerage providers they also tend to have greatly differing costs of settlement and these costs vary across countries.

Retail Investors simply look for opportunities to trade or invest by using platforms such as e-brokerage that are easily accessible to private individuals. Since 2020, there has been a notable increase in the number of retail investors in the Europe region. The work-from-home culture during the pandemic gave people more time to research how to begin investing. Additionally, some people sought to build a financial safety net in case the worst happened because nobody knew how the job market would be after lockdowns. Retail investors now have greater access to European markets than ever before with the custom e-trading platforms developed by both traditional and online brokers to draw in a new wave of retail investors. Financial barriers to investing are lower than ever, accounts are simple to open and administer, and data is much more readily available with streamlined user interfaces and quicker connection speeds. Retail brokers in Europe report that between 2020 and 2021, the number of clients dramatically grew. For instance, the UK-based online trading platform Freetrade, which debuted in the latter part of 2018, added almost 160,000 new users just in January 2021, and it reached the million-user mark in October 2021.

More than half of adult Europeans use internet banking. This share is constantly increasing and has more than doubled since 2007 when it stood at around 25%. Internet banking is particularly popular among 25 to 34-year-olds, with more than two-thirds using this facility. The use of internet banking tends to increase in line with the education level of the user. While only 24% of those with low education use e-banking, 77% of those with high education use this service. In the European region, the share of people using digital banking services increased from 36 to 61 percent between 2010 and 2021. In 2021, it was found that 96 percent of the Norwegian population accessed online banking sites, making Norway the country with the strongest internet banking penetration in Europe, followed by Denmark and Iceland. Online banking is becoming one of the most popular payment methods in Europe, allowing customers of a bank or other financial institution to develop a wide range of financial transactions through their websites. Over time, Europeans' confidence in this electronic payment system has increased.

Europe is home to a large number of E-brokerage companies. There are a large number of players in each country having different market shares. Europe- E-Brokerages Market is highly competitive. Large e-brokerages companies are extending their services across many countries in Europe. E-brokerage companies compete heavily in terms of fees for retail investors. The large user base of the online platforms enables them to lower their fees for investors. The major players in the market include Interactive Brokers, EToro, Saxo Group, Degiro, Plus 500, Trading 212, Exante, X-Trade Brokers, Robinhood, Swissquote, etc.

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