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The security brokerage and stock exchange services market size is forecasted to increase by USD 801.9 billion, at a CAGR of 9.45% between 2023 and 2028. The growth of the market hinges on several pivotal factors. There is a noticeable uptick in demand for Exchange-Traded Funds (ETFs), driven by their simplicity and diversity in investment options. Investors are increasingly seeking out these instruments for their transparency and cost-efficiency compared to traditional mutual funds. Simultaneously, there's a rising demand for broader investment opportunities as individuals look to diversify their portfolios and capitalize on market trends. Another significant driver is the burgeoning popularity of social trading platforms, where users engage in collaborative trading strategies and share insights, democratizing access to financial markets. These trends collectively reflect a shift towards more accessible and innovative investment avenues, catering to both seasoned investors and newcomers eager to participate in the evolving landscape of financial markets.
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The market plays a crucial role in financial markets, facilitating transactions for various assets like stocks, commodities, bonds, and exchange-traded investments. Stockbrokers and traders within financial organizations execute trades on behalf of clients, earning remuneration through brokerage fees or commissions. This market encompasses a wide range of financial instrumentand investment products, offering tools to manage and diversify portfolios effectively. The sector thrives on the liquidity and efficiency of stock and commodity markets, providing essential services that enable investors to buy and sell securities. Bond brokerage and fixed income transactions are also integral, catering to fixed income clients seeking stable investment options. As financial markets evolve, brokerage firms and stock exchanges continue to innovate, leveraging technology to enhance trading platforms and expand their global reach in the dynamic landscape of investment services. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing demand for investment opportunities is the key factor driving the growth of the global security brokerage and stock exchange services market. Investment opportunities are increasing due to investors' demand to improve their capital. This was mainly due to changing economic conditions, which resulted in low-interest rates and limited traditional investment opportunities for investors. Some of the most popular investment options include stocks, bonds, mutual funds, real estate, and certificates of deposit (CDs). Stocks are the ownership rights of companies listed on financial markets. For example, investors who bought shares in Amazon and Tesla a few years ago saw their investments grow significantly because those companies performed well. Mutual funds are a collective pool of money from investors that invest in stocks, bonds, and other securities. These are managed by an investment company and can offer diversification and professional management to investors who do not have the expertise or time to manage their portfolios.
Moreover, real estate investments offer the potential for capital growth through the increased value of the property over time or rental income. This is a long-term option that is favored by investors who are not seeking instant gains. CDs are fixed-term deposits wherein the investor agrees to hold the funds with the bank for a fixed period in return for a higher interest rate than a savings account. CDs serve as a low-risk investment option that can offer long-term returns. Thus, the above-mentioned factors are expected to drive the growth of the market during the forecast period.
The rising adoption of robo-advisors for managing investment portfolios for investors is the primary trend shaping the global security brokerage and stock exchange services market growth. Robo-advisors are computer algorithms designed to provide automated investment recommendations and portfolio management services without the need for human intervention. These systems use artificial intelligence (AI) and machine learning algorithms to analyze market data, identify potential investment opportunities, and provide personalized investment advice to investors. The rise of robo-advisors in the security brokerage and stock exchange services market can be attributed to several factors. Robo-advisors have lower fees compared to traditional financial advisors. Investors can save more money on management fees, commissions, and other charges, making robo-advisors an attractive option for those seeking to invest with a limited budget. Robo-advisors are popular among investors who want to have greater control and transparency over their investments.
Moreover, these systems allow investors to customize their investment portfolios according to their risk tolerance, investment goals, and preferences. They can track their portfolio performance in real-time, access account information, and modify their investments from anywhere using a mobile or web application. Another reason robo-advisors are gaining traction is that they can leverage big data and machine learning algorithms to analyze market trends and predict investment outcomes. This enables robo-advisors to provide more accurate investment recommendations and minimize the risk of investment losses. Thus, the above-mentioned factors are expected to fuel the growth of the global security brokerage and stock exchange services market during the forecast period.
An increase in regulatory compliance with trading is a major challenge impeding the growth of the global security brokerage and stock exchange services market. The increasing regularity of trade compliance is placing a heavy strain on the global securities brokerage and exchange services market. These strict regulations are intended to ensure the integrity, transparency, and fairness of the trading system, but they can also have a negative impact on the global securities brokerage and exchange services market. One of the main problems facing brokerage firms and exchanges is the increasing cost of compliance.
Further, these regulations often require complex and costly procedures that must be followed to remain compliant, which includes hiring additional staff, investing in new systems and technology, and conducting ongoing training to ensure that all employees stay up to date with the newest regulations and procedures. This increases the expenses incurred in complying with these regulations and is expected to negatively impact on the profitability and sustainability of brokerage firms and stock exchanges during the forecast period.
The market research report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Ameriprise Financial Inc. - The company offers security brokerage and stock exchange services such as stocks, bonds, mutual funds, and exchange-traded funds.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the offline segment will be significant during the forecast period. Offline mode trading allows investors to work with experienced professionals and get personalized guidance based on their investment style and goals. In the offline mode, investors have access to a range of investment opportunities, including shares, bonds, and mutual funds.
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The offline segment was valued at USD 866.40 billion in 2018. One of the main advantages of offline mode trading is the ability to negotiate the price of a security, which is not always possible through online trading. This can lead to better returns for investors who have a skillful broker to guide their decisions. Moreover, brokerages often offer comprehensive research and analysis tools to help investors make informed investment decisions. These security brokerage and stock exchange services can include technical analysis, financial modeling, and access to company reports. This access provides investors with a deep understanding of investment opportunities and allows them to make more informed choices. Such factors will increase the segment growth during the forecast period.
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North America is estimated to contribute 43% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. In this region, the security brokerage and stock exchange services market in North America is expected to witness significant growth during the forecast period. The region has a robust financial market, advanced infrastructure, and a highly skilled workforce, making it an attractive destination for investors and businesses. Stock exchanges in North America, such as the New York Stock Exchange (NYSE) and the NASDAQ, are some of the most well-known and active around the globe. Such factors will drive the market growth in this region during the forecast period.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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The market is integral to global financial systems, connecting investors with stock and commodity markets through brokerage firms, banks, and investment firms. These entities facilitate transactions, earning revenue through brokerage fees and commissions. High-frequency trading and algorithmic trading leverage advanced technologies to execute trades swiftly, while cybersecurity measures protect against threats like fraud and hacking. Increasingly, markets are adopting tokenized securities and integrating Environmental, Social, and Governance (ESG) investing criteria. Online trading platforms offer retail investors easy access, supported by market data analytics and digital interfaces. Peripheral services like retirement products and loyalty programs enhance client engagement, while regulatory compliance ensures market integrity. As the sector evolves with predictive analysis and AI-driven solutions, efficient securities brokerages play a pivotal role in capital markets, managing risk and facilitating efficient stock exchange transactions globally.
In addition, the market is pivotal in facilitating transactions within financial organization, connecting clients to stock or commodity markets worldwide. Brokerage fee and commissions are essential revenue streams for exclusive brokers and stock brokerage firms, catering to a wide range of participants, including retail investors. Integration of Environmental, Social, and Governance (ESG) criteria is transforming investment strategies, while digital interfaces and analytical software enhance trading efficiency. Cross-border trading expands market reach, though regulatory compliance remains critical to prevent money laundering and illegal trading activities. Algorithmic trading strategies and alternative trading systems optimize transactions, while risk assessment tools mitigate investor losses. Chatbots aid customer interactions, safeguarded by cybersecurity measures against hackers and other external threats. As equity market capitalization grows, firms like Fidelity Investments manage discretionary assets for middle-income groups, ensuring diversified financial planning and robust market participation.
Market Scope |
|
Report Coverage |
Details |
Page number |
186 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 9.45% |
Market Growth 2024-2028 |
USD 801.9 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
8.42 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 43% |
Key countries |
US, China, Japan, UK, and India |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Ameriprise Financial Inc., Bank of America Corp., Euronext N.V., Hong Kong Exchanges and Clearing Ltd., ICBC Co. Ltd., Intercontinental Exchange Inc., Japan Exchange Group Inc., JPMorgan Chase and Co., Kt Corp., Morgan Stanley, National Stock Exchange of India Ltd., Raymond James Financial Inc., Shanghai Stock Exchange, State Street Corp., StoneX Group Inc., Tadawul Group, The Charles Schwab Corp., The Goldman Sachs Group Inc., The NorthWestern Mutual Life Insurance Co., The Vanguard Group Inc., TMX Group Ltd., and Wells Fargo and Co. |
Market dynamics |
Parent market growth analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the market forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Channel
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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