The invention and wide adoption of the internet is a revolution that changed the world. It has significantly impacted every aspect of our lives, from education to entertainment and, most importantly, business. 

One of the technological inventions heavily powered by the internet is instant messaging. There are over 3 billion users of instant messaging apps across the globe.

What are Messaging Apps?

Messaging apps are software applications that leverage the internet’s reach to send and receive text, voice, and video messages. 

They have become a vital part of everyone’s daily lives, allowing them to instantly connect with friends, family, and colleagues, regardless of location.

Some messaging apps allow users to maintain conversations while switching between devices such as smartphones, tablets, laptops, and desktops.

Adoption of messaging apps in stock trading

These apps offer more convenience and versatility than typical SMS services. This has spurred their adoption in different industries, including stock trading.

Stockbrokers have always strived to engage their clients proactively to keep them informed about the latest market updates. Traditionally, they used to do this via emails, phone calls, and newsletters. 

As more clients ditch traditional phone calls and newsletters for messaging apps in their daily lives, stock brokers have been forced to adopt messaging apps to keep in touch with their clients and communicate real-time updates.

The stock market is well known to be volatile. Instant messaging apps allow brokers to give customers insights into their portfolios, notably when a sudden market change occurs. 

Challenges of messaging app adoption

In recent years, over half of all internet users are mobile users. This indicates that more people use their phones rather than laptops to access messaging apps. 

Most messaging apps are developed to function with specific operating systems. For instance, iMessage is specifically designed for the iOS ecosystem. This limits instant messaging between phones of different operating systems, such as iPhone and Android. 

However, thanks to messaging apps like Spike, businesses can now communicate with their customers across all platforms without needing a device powered by a certain OS, as in Apple devices.

The Good

Over 60 percent of professionals worldwide use messaging apps daily for work. This number is expected to increase as the creators of the apps consistently release more features that improve efficiency and business productivity. 

Speed

Messaging apps allow stock brokers to connect and engage customers in real-time. Some messaging apps enable users to craft customized messages to reply instantly to certain questions asked by clients. 

This reduces wait time and improves communication speed. They also allow sharing files that would have been impossible to send using typical text messaging apps.

Instead of putting clients on hold, a stockbroker can easily ping their colleagues to take over the chat without the customer noticing any lapse.

These dedicated features help stockbrokers share real-time data with their customers, which can help them make instant decisions about their portfolios.

Day traders using instant messaging apps reported fewer financial losses than others.

Familiarity

In today’s digital world, people are always on the go, and they will not always be available to pick up calls or hold long conversations on phone calls. However, it is easier to handle other tasks while texting. That is why it is not surprising that many customers prefer texts to calls.

Meanwhile, messaging apps are not communication channels that a company will have to create unique courses or write long articles to explain to customers how to use them.

Customers are already familiar with these tools, hence the familiarity and easy adoption.

Efficiency

Instant messaging saves a lot of time as you can easily track it. It can also be sent to multiple contacts simultaneously, unlike calls, which require dialing clients’ contacts one after the other. 

Stockbrokers can use it to broadcast real-time market updates and noteworthy news to their clients, such as the inflation trend and how it might affect the stock market. 

Most people do not check their emails every minute for the latest inboxes. 

They, however, tend to check their instant messages more. Messaging apps also encourage efficient communication as messages are replied to faster. 

Clients are more comfortable using this communication channel as they are more assured of instant responses to their questions.

Collaboration

Messaging apps provide a space for informal connections that typically happen during lunch breaks or celebration gatherings. 

With the change in work culture, which has resulted in many employees working from home, many people find themselves sitting all day in silence in front of their computers.

Studies report that people with best friends at work are more committed, productive, and happy.

Dedicated instant messaging apps allow companies to track projects and workers’ productivity and permit the staff to have informal conversations without disrupting work.

It allows collaboration among stock brokers and helps them leverage informal networks.

The Bad

Unlike typical messaging apps, instant messaging apps for businesses are not free. Those with free plans limit access to certain features. Others will usually require that you show the messaging app’s branding. 

Despite this, you should test out apps with free or trial plans to check out their features and compare without committing monetary payment.

Messaging app usage can be abused by employees if not regulated. It can lead to distraction and create a blur between work-life balance.

Having conversations for the sake of having conversions is not the most effective use of company resources. Certain activities executed by employees using these tools can run afoul of regulatory compliance, hence the need to regulate their use among staff.

The Ugly

Within the financial industry, keeping records of client communications is legal in most countries. Not all messaging apps have features that permit easy capture of communications with clients, which can present a compliance risk.   

Another issue with messaging app usage for stock trading is data privacy and retention. 

Messaging app developers who design their products to transfer data without encryption expose their users’ data. Messaging apps using obsolete protocols can also compromise users’ data.

Similarly, when brokers use instant messaging apps linked to their personal profiles to conduct business with clients, the data, even if end-to-end encrypted, will likely be stored on the broker’s or client’s app. 

Upon quitting the firm, such brokers might leave with the customer’s data, which can lead to a loss of revenue for the company and expose them to government fines or legal actions.

That is why stock broker companies need to use messaging apps that comply with required regulations in their area and ensure clients’ data are well secured and accessible to the company.