Digital Investment - South Africa

South Africa

Highlights

Total transaction value in the Digital Investment market is projected to reach US$7.55bn in 2024.
Total transaction value is expected to show an annual growth rate (CAGR 2024-2029) of 4.89% resulting in a projected total amount of US$9.59bn by 2029.
Neobrokers dominates the market with a projected total transaction value of US$4.92bn in 2024.
The highest cumulated transaction value is reached United States (US$1.78tn in 2024).

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Digital Investment market in South Africa is experiencing significant growth and development, driven by various factors such as customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. Customer preferences in South Africa are shifting towards digital investment platforms due to their convenience and accessibility.

Investors are increasingly looking for online platforms that provide a seamless and user-friendly experience, allowing them to easily manage their investments and track their performance. This preference for digital investment platforms is also influenced by the growing adoption of smartphones and internet connectivity in the country, making it easier for individuals to access investment opportunities and information. Trends in the market are also contributing to the development of the Digital Investment market in South Africa.

One notable trend is the rise of robo-advisors, which are automated investment platforms that use algorithms to provide investment advice and manage portfolios. Robo-advisors offer lower fees compared to traditional investment advisors, making them an attractive option for cost-conscious investors. Additionally, the use of artificial intelligence and machine learning in investment platforms is becoming more prevalent, enabling investors to benefit from advanced data analytics and personalized investment recommendations.

Local special circumstances in South Africa, such as a growing middle class and a desire for financial inclusion, are further driving the development of the Digital Investment market. As more individuals in South Africa gain access to financial services and become financially literate, there is an increasing demand for investment opportunities that can help them grow their wealth. Digital investment platforms provide a solution by offering a wide range of investment products and services that cater to different risk appetites and investment goals.

Underlying macroeconomic factors also play a role in the development of the Digital Investment market in South Africa. The country's stable economic growth, favorable regulatory environment, and increasing investor confidence contribute to the attractiveness of the market. Additionally, the low interest rate environment in South Africa encourages individuals to seek alternative investment options that can generate higher returns.

Digital investment platforms offer the potential for higher returns compared to traditional savings accounts or fixed deposits, making them an appealing choice for investors. In conclusion, the Digital Investment market in South Africa is experiencing growth and development due to customer preferences, trends in the market, local special circumstances, and underlying macroeconomic factors. As more individuals in South Africa embrace digital platforms and seek investment opportunities, the market is expected to continue expanding in the coming years.

Data coverage:

The data encompasses B2C enterprises. Figures are based on transaction values / revenues / assets under management and user data of relevant services and products offered within the FinTech market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending, population, internet penetration, smartphone penetration, credit card penetration, and online banking penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.