Consumer Behavior On Digital Investment Platforms: An Investigation Into the Most Important Characteristics of Digital Investment Platforms for Well-educated, Non-sophisticated Investors

Abstract

Due to our world becoming more and more digitized, all industries and sectors have to keep up and make sure they do not fall behind competition. This is also true for financial institutions and wealth managers. Luckily, new technology does not only create threats, but also opportunities. One of these opportunities lie within the wealth management sector and has resulted in the creation of several types of digital investment platforms. Unlike regular wealth managers, that often require a high net worth to invest with them, digital investment platforms allow more regular people to see their personal finances grow over time. The question is then, what characteristics of such platforms must exist in order to activate more regular people, so they can enjoy better financial returns? This study uses a sequential-qualitative-quantitative approach in order to help digital investment platforms figure this out. Through qualitative interviews with industry experts, barriers to investing are found, built into characteristics of digital investment platforms, and then tested on a population of relative young, well-educated people, with generally little knowledge and little experience within investing. Through conjoint analysis on a population of n = 170, it is shown that the three most important characteristics digital investment platforms have to include in order to attract the population tested, are: the option of letting the platform build the users’ portfolio for them, low cost, and the option of investing small amounts of money.