Two years after the outbreak of the pandemic, the growth of the broker remains in Spain, its “top” market in Europe, where it is present in another six, thanks, in large part, to some of the lowest commissions in the market. Its CEO, Muhamad Said Chahrour, is optimistic about the future and hopes to increase the customer base by 30% per year, from the current 2.1 to 7-8 million in 2026.
How are you doing in Spain after two years of the ‘boom’ of clients due to the confinements?
Spain is our top growth market, number one in terms of new customers. Obviously, our offer is competitive. , also not in the US, although we apply 50 cents to cover the currency exchange. What we must always remember is the low rate of investment penetration that exists, in general, throughout the European Union. Less than 10% of people invest in the capital market. Unfortunately, they seem to still be something for older people and men. In Germany only 13% of the investment population is women. Culturally there is still a misunderstanding. At DeGiro this percentage of women is 20%, 40% above the average for the whole of Europe and this is the kind of thing we are working on to change it.
And if women decide to invest it is an important potential…
It is the greatest potential ever seen. It is not age, skin color, or profession, but literally the question of gender. If only 13% are women, it means that, in terms of the total population, only 1% of all women invest.
There was literally a queue to be a DeGiro customer in the worst months of the pandemic. Do you fear a significant drop now that everything is back to normal?
That is the big question: was Covid a cyclical or structural accelerator? We believe it was a structural driver with a cyclical push. But it did allow more people to think about it. What we want is for people to understand that you don’t need time to invest. You can create an ETF scheme and let it run.
There is a strong rotation out of the technology growth sector towards value
How do you see the market right now, in full sector rotation?
There is a strong rotation out of the technology growth sector towards value. This has a lot to do with institutional investors going back into airlines, tourism, oil and gas. But everything is cyclical to me and it’s positive for us as it makes investors rotate their portfolio. The business has returned to the point that I was saying, it is important that they understand that they must diversify. It is very interesting to see the volatility that we have in Europe with the low liquidity that exists, half that in the first quarter of 2021 when the volatility is double.
You are not going to tell me how many clients you have in Spain, but you did publish a 55% increase in Europe in 2021…
We only break down by region. We started 2021 with close to 1.3 million customers and closed with 2.1 million customers, which represents a net increase of 730,000 customers.
“25% of customers say they want to have access to cryptocurrencies with us”
Do you think they will be able to maintain that growth this year?
The goal is to add between 650,000 and 850,000 customers. It is ambitious, since it is similar to the one achieved the previous year, but with a much more normalized context. Flatex De Giro is focused on quality, not quantity. I’ve always said that I’d rather find 100,000 new great clients, rather than 900,000 millennials who trade, lose almost all their money, and walk away. It is a matter of perspective. The biggest mistake that many neobrokers are making is burning young people, who enter into CFDs or options and it is their first experience as an investor. How difficult is it to win back these customers? They are being sold an investment concept that is to become a millionaire in a very short time, but the real concept is to create a portfolio that allows you to be financially independent in 20/30 years.
And for when the cryptocurrencies?
We hope that it will see the light of day in the summer of this year, perhaps in the fourth quarter because there are still some regulatory issues that we must assess. 25% of customers say they want to have access to cryptocurrencies with us and that is why I see it more as a loyalty element. I want them to be able to provide us with their entire investment world. Beyond the income that crypto generates, it is more important for us to be a supermarket of investment products. We want to be the Eroski of financial products, where you can buy everything.
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