Purple Group CEO Charles Savage said EasyEquities is a significant threat to incumbent financial services operators like the big banks.
Speaking to Biznews’ Alex Hogg, Savage said eCommerce in the nineties showed that a company often starts off as a joke but then becomes a threat and ultimately a household name.
“That is exactly what is happening in financial services. Digital alternatives are threatening the traditional physical world of financial services,” he said.
“This growth wave gives people a chance to say, ‘I told you it was not going to work’. Just like eCommerce, they are going to be wrong again.”
Savage said digital-first companies, like EasyEquities, would own the future of financial services.
“The next Sanlam will be digital. The next big bank will not be Capitec with physical distribution – it will be digital. The next Coronation or Allan Gray will be digital,” he said.
Savage said Purple Group and EasyEquities are perfectly positioned for the digital wave in financial services in South Africa.
“We are the market leader. We are the incumbent. We are the obvious winner when it comes to digital financial services,” he said.
He said EasyEquities have 1.7 million registered account holders with 800,000 active accounts, which is ten times bigger than its nearest competitor.
Savage added that they have a very young customer profile which bodes well for the company as long as they can retain these customers.
“The wealth in South Africa will be sitting with EasyEquities twenty years from now, which shows the company’s potential,” he said.
The future of EasyEquities
Although EasyEquities made a name for itself as an online stockbroking business, Savage said it is only the beginning of their plans.
“We are a broad-based financial services group. We are going to enter lending and life insurance, and who knows what comes next,” he said.
“We are not only threatening the stockbroking market anymore. We are going to start threatening the insurance and lending markets.”
The company is also entering the Philippines market, which Savage describes as an exceptional opportunity.
The Philippines population is young and educated, making it highly suitable for digital financial services.
“It is a young and emerging economy with a high employment rate and a large skills base,” he said.
Digital banking and smartphone penetration are also pervasive in the Philippines, which are an enabler for online financial services like share trading.
The best part is that there is no competitor to EasyEquities taking advantage of the opportunity in the country.
Although Philippinos have a high affinity for America, only 1% of them have access to US-based shares.
“The market setup is perfect for us,” Savage said.