Retail investment study 2024: Business models at a tipping point?

Retail investments study 2023

Simon-Kucher’s retail investments study 2024 is out! We have examined the shifts in retail investors' behavior, emerging trends, and the impact of regulatory changes on investment providers for the European market. We seamlessly merge insights from data, research, and industry best practices in the study. Ready to dive into a selection of our most remarkable findings?

  • The retail investor market, measured by the number of accounts, has seen impressive growth. In Germany, there has been a 26 percent increase in the number of accounts since the onset of the pandemic, but only 23 percent of customers open accounts with branch-based retail banks.
  • Below par digital customer experience and overly complex price models are amongst the most important reasons for retail investors to shy away from incumbents and opt instead for online providers.
  • In terms of pricing, over 70% of retail investors throughout Europe prefer simple all-in price models.
  • Regarding customer experience, digital players are now starting to attack the core USP of branch-based business models in the retail investment space: advice. Today’s leading apps (user interfaces) give intuitive guidance that is not yet MiFID II advice (i.e. a personalized investment recommendation) but sufficient steering for a significant share of investors to take an investment decision. Offering both digital and hybrid recommendations for deposit investments and optimizing existing portfolios based on ESG or risk/return factors, are on the horizon and could create a tipping point for the industry.
  • The foreseen inducement ban, as introduced by the retail investment strategy, will likely lead to a loss of between 30 and 50 percent of today’s revenues for providers of investment solutions, both for incumbents and online providers. To simplify, the less providers depend on visible fee components like transaction charges or recurring charges, the more their current revenue base is at stake. These regulatory pressures will necessitate a drastic overhaul of current monetization models in use.

Curious? Access the complete study to discover how incumbents and digital attackers can capitalize on recent market trends and fortify their revenue models for the future.

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