Mexem Investment

How foreign FinTech disruptors are driving local economic growth

The explosion of pioneering FinTech innovations from around the world is disrupting and transforming the global financial landscape. From payment, investment and lending innovations, to mobile money, digital wallets and Blockchain technology, FinTechs make financial services more relevant, accessible, affordable and easy to use by society. In emerging markets, FinTechs are destined to flourish and adoption is expected to skyrocket over the coming years. Welcomed or not, FinTech innovations are disrupting the South African financial landscape and accelerating the digital conversion of financial services.

Pioneering FinTechs like Mexem are breaking down trading and stock market entry barriers. Mexem empowers everyday South Africans to trade and invest intelligently with first-in-class and user-friendly trading platforms, superior trading algorithms, expert knowledge sharing and online security, customised portfolio reports and analytics, always-on customer service, attractive terms and access to 120 exchanges across the globe. The group’s vision of financial empowerment is driven by Israeli-born Mexem CEO, Itai Liptz, a zealous advocate of global knowledge sharing.


Israel’s drivers of innovation

The Global Innovation Index (GII) recognises innovation as a key driver of economic growth and prosperity and the world’s top 10 innovation heavyweights, according to Bloomberg’s 2017 Innovation Index, are South Korea, Sweden, Singapore, Germany, Switzerland, Japan, Finland, Denmark, France and Israel.

The 2017 Global Competitiveness Report ranks Israel the 3rd most innovative economy and given the geographic location and economic size, Israel’s innovation rankings have sparked great interest in the drivers behind this rising economy. New ideas are fuelled by existing knowledge bases and effective knowledge sharing across industries. This entails effective collaboration between diverse technologies, skillsets, research and development. The GII recognises the importance of collaboration to innovation and in 2017 ranked Israel 2nd in this area.

The success of Israel’s innovation ecosystem is driven by a flexible economy, young population, high demand and adoption rate of FinTech solutions. What’s more, it is pushed forward by access to capital and a highly skilled workforce, extensive R&D capabilities and regulations conducive to FinTech growth. Israel’s compulsory military service also instils a culture of discipline and transfers advanced technical and risk management skills invaluable in the business and trading space.


The urgency of financial understanding

The lack of trading knowledge and low savings rate in South Africa poses a major socio-economic barrier to the prosperity and financial stability of the nation. Despite rising living costs and the current economic environment, poor financial planning is mainly fuelled by a lack of financial education, particularly regarding trading on the stock exchange.

The financial services sector should first dispel the myth that saving and investing is reserved for the elite. FinTechs can play a key role in easily disseminated financial education, whether that be through knowledge sharing or practical initiatives such as the Johannesburg Stock Exchange (JSE) Investment Challenge.

FinTech disruptors like Mexem are causing a stir in the industry. The extensive knowledge and mobility they bring will leapfrog businesses and consumers into an inclusive and mutually beneficial global financial marketplace. Regulation is essential in this rapidly evolving space and the South African Reserve Bank is dedicated to the monitoring of FinTech developments. Instead of prohibiting cutting-edge and customer-friendly solutions from entering the market, legislation should strike a fine balance between promoting competition and protecting customer interests.

Why the SA stock trading industry needs customer service

Why the SA stock trading industry needs customer service

South African banks are rated globally as sound and strong, with international banking advisory groups applauding the stability of service in corporate and retail banking. The stock trading industry on the other hand, is dominated by complacency and a lack of transparent customer service.

Currently, the industry is dominated by brokers and banking professionals making deals the general South African population don’t fully understand. The general belief is that trading on the stock exchange, particularly abroad, is reserved for those who know how to do it. And brokers and banks are happy to operate with limited customer service.

“Banks and brokers are complacent,” says Mexem CEO Itai Liptz, “They are comfortable with their X amount of clients who they charge high fees to invest in a market and share little about where their money is being invested.” Furthermore, clients are not informed enough to invest in anything beyond their trusted brokers.

“As a result, South Africans are left to trusting their financial advisors to invest on their behalf and paying the high fees, even if they are unsure of where the money will go,” says Liptz.

The truth of the matter is that anyone with the right information and support can trade on the stock exchange. The opportunities for South Africans to invest their funds at low fees and put themselves in a better financial position are there. Regardless, the gross rate of savings for the entire population remains at 3%.

Liptz says brokers don’t share enough detail to empower clients to make more investment decisions on their own. The lack of knowledge makes transparent customers service all the more important for customers.

The current status quo

The last two financial years have been tough on South Africans. Evidence of cost cutting is everywhere, with heavy reliance on loans to stretch the monthly budget. After-tax income is not keeping up with inflation, making South Africans more protective of their limited savings.

Coupled with extra financial stress, confidence in the South African economy is still low. Trust in traditional banking systems is low with fear of fraud and poor customer service central to this.

“Money is so important today and South Africans need to feel confident in the investments they make with the limited savings left at the end of the day,” says Liptz, “That’s where customers service is important.”


What does customer service look like in the industry?

Customer service means engaging with clients, solving their problems, finding them the best returns and informing them of their investment options with personalised communication. Non-traditional players emerging in the industry are disrupting this complacency by providing digital solutions and always-on customer support.

Mexem.co.za is a trading platform that empowers customers with accurate and relevant trading advice. The online trading platform makes it easier and more accessible for South Africans to trade locally and internationally at low costs, with always-on access to your account and customer service 16 hours a day, 6 days a week.

“We also send clients signals informing them what shares to invest in and when via emails and SMS,” says Liptz, “It is about going above and beyond for the client, even if they have small investments with us, they have the support and confidence to know their investments are being looked after.”

This is not unheard of. According to Liptz, Mexem is in line with American customer service standards. American trading markets are highly saturated. Banks and brokers have to stay competitive with efficient and ever-evolving customer service.

In South Africa though, Mexem is an anomaly. Top investment firms are complacent and clients don’t know how to ask their financial advisors the tough questions.


Why banks need to invest in customer service

Liptz says banks are not hungry enough to invest in customer service because they are comfortable with a product that works.

“This is a mistake and a missed opportunity for even greater investments,” says Liptz, “A client who feels supported and empowered with the right information will ultimately invest in more products, providing more commission for banks simply because they have the confidence to do so.”

The approach to personal finance is evolving where people want more knowledge and control over their investments. Clients are looking to partner with emerging trading companies like Mexem, where there is transparent financial services and empowered investment opportunities.

Trust is earned, but confidence is maintained with support and engagement. It’s time the industry gets onboard and provides the customer service potential investors need.