Online has forever changed the way we make purchases, and it has also opened a window to fraud. Recent financial services purchases and patents offer insight around where the market is headed and clues toward potential white space that servicers could look to fill.
Morgan Stanley Purchases eTrade
When Morgan Stanley acquired eTrade in an all stock deal for $13B, it set of rounds of speculation around what it would mean for the space. Would it inspire other acquisitions of competing consumer trading platforms? Possibly. Sentiment around it is solid, with the only negativity coming in around the Coronavirus’s impact on the market:
And it seems to be signaling a trend, at the least. Particularly as we see how Goldman Sach’s is sharing its openness to acquisitions to fill relevant gaps:
“We’re ... very open to the proposition of acquisitions that fill gaps or accelerate elements of our growth plan,” Scherr said at a conference convened via conference call and webcast, rather than in-person, due to concerns about the coronavirus outbreak.
There has been wide investor speculation about Goldman’s appetite and ability to do mergers or acquisitions since rival Wall Street bank Morgan Stanley (MS.N) announced plans last month to buy discount broker E*Trade (ETFC.O).
And when we look at a timeline comparison, we see less conversation about market fluctuations in light of these actions, and more around solutions (acquisitions) that financial services firms are making to bolster positions, including Intuit’s Credit Karma deal:
Timing is Everything
The timing for this E*Trade deal couldn’t have been worse for its competitor, Robinhood. The commission-free competitor crashed under pressure, and at the precisely worst time for such a thing to happen. And it happened twice:
Robinhood has been a popular tool for millennial investors, due to its commission-free policy and openness to cryptocurrencies. The company has not given a reason for the outage (just like last week), though one possible cause was a surge in trade volume as investors grow more concerned with the coronavirus outbreak.
Investopedia sums up the key differences between the two:
Robinhood and E*TRADE are as different as night and day. Well-established E*TRADE offers deep discount commissions and a broad product line. Upstart Robinhood takes on the financial industry with commission-free stock, ETF, options, and cryptocurrency trading. E*TRADE has been around for over 30 years, while Robinhood rapidly made a name for itself in the smartphone era. E*TRADE used those years to develop better trading platforms, apps, and educational materials. Are they worth the extra fees? We'll find out as the two brokerages go head to head.
Millennials Watching the Market Closely
So, maybe Goldman Sachs won’t be looking to acquire this particular app, but there are plenty of other options. It makes the case for investors to potentially not put all of their stock in a commission-free basket, regardless of how attractive it is to be able to trade in cryptocurrency.
And you can be certain millennial investors are closely watching these events unfold, as well as other trending news in the financial services sector:
And there are other gaps to fill beyond trading stock, of course - like managing one’s credit history, for example. . . .
Rather than pursuing an IPO, Credit Karma was just acquired by Intuit – and that’s big news here as well – and why Intuit is trending in the space. This move could signal a rash of acquisitions (over IPOs), which wouldn’t be unwise considering recent IPOs not performing as expected of late!
So, what does all of this tell us? Where is the market headed? Ease of use and protection from fraud are safe bets, but that’s far from the full picture. We can explore patent activity from the past few years for some contexualized market research clues.
Financial Services Patents
When we look at a general search around financial services patents filed in the last three years, from March 2017 through March 2020, we see trends that any business in the space should be closely monitoring. There’s activity around fraud detection, automating processes with AI, mobile options, self-service applications, ways to authenticate and streamline transactions – and more:
And it’s all easy to dig into and investigate. Each node represents a document, with relevant insight. And customers can click through to investigate the source and create additional analyses around their discoveries:
And one way they’ll want to do that immediately, would be around tracking fluctuations related to Covid19.
Market Fluctuations & Coronavirus Impact
Having the ability to monitor competitor companies, news, blogs and patent intel over time – and capture trend analytics in powerful data visualizations is helping industry leaders stay on top of trends. And sometimes they’re able to create new categories, even in the most challenging times.
This intel can be game changing for a company considering a merger or acquisition of its own. Having the pulse of fluctuations and being able to quickly view how conversations connect can certainly have a financial impact.
Reach outand we’ll show you how to set up your own tech scouting dashboard, or whatever category makes sense for your brand. And how you can combine it with consumer insight to make the most of the consumer and market intelligence at your disposal today. You can be Morgan Stanley and Intuit are doing so – and your competitors are liking doing the same, particularly in these volatile times.
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