Malaysia: Survey on Pandemic’s Impact on Digital Investor
New Traders Showed Confidence and Resilience, While Mature Traders Discovered Online Investing Benefits
With financial technology and wealthtech gaining popularity among investment seekers in recent years, it came as no surprise that digital investing boundaries were pushed amidst the virus-related movement restrictions and accelerated adoption of contactless digital technologies.
A survey conducted by Rakuten Insight Malaysia (Rakuten Insight) in December 2020 revealed that millennials aged between 26 and 40 comprised 68% of those who used online investment platforms last year. The research company also found that among digital retail investors who chose to trade in equities, the highest volume of trading activity was reported by the 26- to 30-year-olds.
Rakuten Insight, a purely digital market research hub servicing clients across Southeast Asia, conducted the pilot nationwide online survey among digital investors, with an emphasis on those in urban centres, namely Kuala Lumpur, Selangor, Penang and Johor.
Rakuten Insight’s Country Director Mr Collin Leow said, “The pandemic economy saw investing and saving habits changing out of necessity and due to the accessibility of technology. While the survey set out to discover more about the rise of the younger digital investor in the new norm, a surprising find was that digital investing was not primarily the domain of millennials, with 32% comprising those in their 40s and 50s. We also saw that investment opportunities which could provide long-term growth (45%) and short-term returns (18%) gained more popularity among investors last year. From the results, we can assume that millennials viewed investing, and not just saving, as a way to build financial stability during a challenging period.” In addition, preference for equities investment saw an increase of 47%, while unit trust and mutual funds rose by 29.28%.
Rakuten Trade Sdn Bhd’s Chief Executive Officer, Mr. Kazumasa Mise, commented, “It is undeniable that the pandemic saw the rise of the digital retail investor across markets worldwide, including here in Malaysia. The findings of the survey reflected the traction we witnessed on Rakuten Trade’s fully digital platform in 2020, with significant trading activity seen among those aged between 26 to 30. These new traders had previously never traded in equities before last year and this investing trend has continued in 2021 despite the easing of movement restrictions.”
Mise added, “While traders may have easy access to digital investment tools and information, the need to develop strong financial literacy remains vital. Rakuten Trade firmly believes that trading ideas, insights and intelligence from certified experts are key here and we encourage traders to utilize them.”
Rakuten Insight also reported an upward trend in online trading activity among existing traders with 44% more digital retail investors increasing their trading activity during the movement restriction periods. Almost 34% of digital retail investors said they will continue to invest using their current online trading platform while almost 29% will increase their investment in the near future.
Technology-savvy millennials, who were among the hardest hit by the pandemic, made up the biggest group of digital retail investors who chose to invest online to improve their financial security. The survey also found that most traders (73.83%) are looking to invest more wisely in the future.