Rakuten banks on the Millennial market

We are now leveraging more and more on digital and socially inclined platforms to communicate and educate. We started Rakuten Trade as a financial technology business with zero clients and in the last two years, we have activated almost 40,000 accounts. Kaoru Arai

THE retail investment market is continuing to grow and is one of the best performing investor segment for Bursa Malaysia year to date.

Millennials are contributing heavily towards that growth; this group holds the record for the fastest-growing new accounts. They currently form a significant part of the retail participation.

Kaoru Arai, managing director of Rakuten Trade Sdn Bhd, shares some of his thoughts with StarBizWeek on the potential of focusing on the Millennial market.

Do you see an increase in Millennials going into share investing? What is the Millennial percentage in your base? Has this base been growing?

We definitely see a growing interest from the Millennials to venture into share trading and believe that this is mainly due to how the industry has embraced digitalisation to cater to more tech-savvy investors, primarily those below the age of 40.

We are now leveraging more and more on digital and socially inclined platforms to communicate and educate.

Take for instance Rakuten Trade. We started Rakuten Trade as a financial technology business with zero clients and in the last two years, we have activated almost 40,000 accounts and executed almost RM6bil in trading value on Bursa Malaysia. These figures continue to grow exponentially month on month.

Almost 80% of our clients are below 40 years old and more than 40% are new to the equities market. The Rakuten Trade platform delivers easy to use and efficient services that have narrowed the industry gap and as a result, we have activated a completely new segment of traders.

Why do you think the stock market is appealing to them?

Ease of access is part of the appeal today, as share trading is not new. Many of the millennial investor segment grew up knowing that this is what ‘adults’ did to diversify their wealth but when it came time to actually trading, they were hesitant.

Share trading was generally seen as complicated and requiring face to face engagement.

In this digital age, speed, convenience and access has become essential. A game changer of sorts, if the industry is willing to embrace it.

Accessibility does not just mean trading but the complete 360 degrees experience from account opening, execution, settlement and trade, research and trading ideas as well as rewards and financial education.

What were the activities that your house has done to increase the young investor base? Has this been effective and what are your future plans to increase this group of young investors?

At Rakuten Trade, we understood the need to address the concerns of the more digitally savvy investors from day one. These investors are not just confined to beginners but the more mature traders.

Education is very important, not just on share trading itself but the method of trading via a completely online platform.

In line with our aim to educate, we have a suite of social media friendly videos and images to help guide our clients to trade digitally and seamlessly.

In addition, the Rakuten Trade Research Team publishes technical reports and market reviews daily as well as investment ideas exclusively centred around the small mid cap market.

This is important as investors generally want pre and post service support. The difference here is how we communicate our research.

For example, our Research Team issues a simplified one-page report with minimal jargon. This is to encourage greater understanding among less seasoned retail investors while providing succinct and precise information to the more mature trader.

The reports are shared in a digital friendly manner, via our social media platforms and through in app push messaging, making them readily available to our clients.

At Rakuten Trade, we strive to keep things simple yet effective in tandem with the constantly evolving digital landscape. To us, innovation and being flexible are vital and our products must be cater to the rapidly changing needs of the market effectively.

Why is it important for Millennials to start investing?

Many Millennials are either just starting out in their careers or are on an upwardly mobile trend.

Most may not have reached a career plateau making this an ideal time to start looking at ways to make their income work harder for them and can afford to be a bit more adventurous.

Investing should be for longterm and should be a means to gain more financial security.

Furthermore, large capital investments are no longer needed for the investor to be taken seriously hence no longer a deterrent. With information more readily accessible through social networks and the availability to search for almost everything online, completely online share trading has become a smarter way to invest.

This makes the share trading market much more appealing for the more socially inclined generation of consumers. —

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