Investment apps faced with clumsy navigation prompt retail investors towards riskier financial decisions - Study suggests
In a recent report by product research firm Check, Lanre Wright, Head of Innovation and Growth, emphasised the importance of building seamless, mobile-first experiences for emerging investors to become the next market leaders. The report, however, did not disclose specific figures on the number of institutional investors surpassed in Q1 2024 compared to earlier data.
The report highlighted several key findings regarding the usability issues faced by retail investment platforms in Nigeria and their impact on retail investor participation. It was revealed that 80% of these platforms fall below global usability standards, with slow, clunky, and confusing user experiences. This poor design hampers the ability of these platforms to retain users and effectively engage new investors.
The lack of user-friendly platforms pushes first-time investors towards riskier alternatives such as Ponzi schemes and crypto scams. This has resulted in significant financial losses, with Nigerians losing ₦90 billion to Ponzi schemes in the last two years alone. The report did not provide information on the specific Ponzi schemes or crypto scams that Nigerians have lost money to.
Despite these challenges, the retail trading volume in Nigeria has seen a significant increase. In 2020, the volume stood at ₦618.79 billion, which jumped to ₦2.31 trillion in 2024, marking a 106.3% year-on-year increase from 2023. Factors contributing to this growth include macroeconomic pressures, improved mobile access, rising financial literacy, attractive interest offerings, and stronger market performance.
The report also pointed out that only two of the audited investment platforms met the global usability benchmark score of 68. The rest of the platforms suffered from clunky KYC processes, confusing navigation, cluttered interfaces, and a lack of embedded user guidance.
The report underscores the cost of weak investor education and poor digital experiences that fail to retain retail users on legitimate platforms. It suggests that future market leaders will be those who build seamless, mobile-first experiences that empower emerging investors through speed, simplicity, and education. This emphasises the need for investment platforms to prioritise user experience and investor education to foster sustainable growth in the market.
It's worth noting that fewer than 500,000 Nigerians out of 3 million registered capital market investors actively trade. Platforms like PiggyVest and crypto apps have 5 million and 3 million users, respectively. Nigeria's capital investment market needs to invest in user trust by building out seamless user experiences in their digital backends to attract and retain more active investors.
The report did not mention any specific improvement in the number of retail investors in Nigeria compared to earlier data. However, the growth in retail trading volume suggests a positive trend in retail investor participation. As the market continues to evolve, it will be interesting to see which platforms rise to the challenge and become the market leaders Lanre Wright spoke of.
- To remain competitive and attract more retail investors, Nigeria's capital investment market needs to prioritize mobile-first experiences, as well as invest in user trust by streamlining their digital backend processes.
- The report underlines the significance of innovating in the crypto space, as poor digital experiences and weak investor education hinder retail users from choosing legitimate platforms, pushing them towards riskier alternatives like crypto scams.
- For emerging investors to surpass institutional investors, they require seamless, user-friendly, and education-focused investment platforms that utilize cutting-edge technology and finance solutions like mobile banking, crypto trading, and attractive interest offerings.
