Damian Hitchen, CEO of Saxo Bank, discusses the company’s innovative new offerings for clients with Economy Middle East. Always in tune with customer feedback, Hitchen believes that their ongoing efforts to improve customer experiences will position Saxo Bank at the forefront of the competition and boost its prospects for growth.
Saxo Bank has announced pricing changes across many markets. How does the new pricing offer fit into your overall strategy? And what kind of impact, in your opinion, will this have on the market in general?
The new pricing changes at Saxo Bank are a key element of our strategy to offer clients a more cost-effective investment experience. With over 1 million clients globally, we now leverage our scale to secure lower pricing from market counterparts, passing these benefits on to our clients.
The decision stems from client feedback and a thorough analysis of online trading platform prices. The global pricing reduction aims to make trading across markets and asset classes more cost-effective for our clients, promoting diversification. This move will attract new clients, increase activity among existing ones, and contribute to our market share growth. It aligns with our commitment to responsiveness and delivering value to our clients.
How will these changes affect the average cost of trading for your clients in the Middle East?
These pricing changes will significantly reduce the average cost of trading for our clients in the Middle East. With over 1 million clients globally, Saxo Bank can now secure lower pricing from market counterparties, benefiting our regional clients. By passing on these cost savings, we aim to make trading more affordable. We want to enable clients to invest in their portfolios at a lower overall cost.
To illustrate the impact fees can have on portfolio growth, let’s use the following simple example: If a client invests AED100,000 into a portfolio and leaves this for 40 years, with an average return of 5 percent per annum, what is the difference between an account that charges a 1.50 percent annual fee versus a 0.25 percent annual fee? The portfolio with the 1.50 percent yearly fee would grow to AED384,610. Meanwhile, the portfolio with 0.25 percent would grow to AED636,925. Hence, the impact of a 1.25 percent difference in fees is over AED252,000 over this period.
This could significantly impact major purchases, key financial goals and even retirement dates for an investor. This reduction in trading costs will help us provide a more cost-effective and efficient investment experience for our clients in the Middle East, fostering growth and increased activity in the region.
What prompted the decision to remove inactivity fees altogether? How will this affect Saxo Bank’s revenue stream?
The decision to remove inactivity fees at Saxo Bank was prompted by a strategic focus on enhancing client experience and responding to their feedback. By eliminating inactivity fees, we aim to provide more flexibility to our clients, encouraging them to engage with the platform without concerns about additional charges during periods of lower activity.
While removing inactivity fees may impact a portion of our revenue stream traditionally generated from such fees, the positive impact on client satisfaction, retention and increased trading activity will offset any potential reduction. This will help us prioritize client needs and deliver a more client-friendly and transparent trading environment.
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How do you expect these changes to impact Saxo Bank’s market position and client base?
We anticipate that the pricing changes at Saxo Bank will strengthen our market position and attract a broader client base. By offering more competitive pricing with lower trading and execution costs, we aim to enhance our appeal to existing and new clients. The global pricing reduction aligns with market demands and positions Saxo Bank as a cost-effective and efficient investment solutions provider.
This strategic move is expected to contribute to our market share growth as clients benefit from a more attractive pricing structure. Eliminating inactivity fees and overall cost reductions may foster increased client engagement and loyalty. Overall, we believe these changes will positively impact Saxo Bank’s market position by delivering value to clients and promoting a more diverse and active client base.
What has the response been so far from your clients to this new pricing scheme?
We are still in the very early days of the new pricing launch. However, we have already seen, on a global level, significant increases in visitors to our platforms and app, increases in account openings, funding of new accounts, and new trading clients since launch. Hence, the initial feedback and data are very encouraging and hopefully demonstrate the win-win approach of this initiative.
What are your growth aspirations for the region in the coming years?
Our growth aspirations for the region are robust. It’s driven by the positive economic outlook, increasing population, and growing trade activity in the Middle East. With the UAE and KSA leading in economic growth, we aim to capitalize on the buoyant market conditions and increase investor interest.
Saxo Bank is committed to expanding its market share in the region by providing a combination of one of the best global trading platforms and competitive pricing. We anticipate continued client numbers and activity growth facilitated by the recent pricing reductions and client-centric initiatives.
The positive economic news, rising IPO activity, and increased liquidity in local exchanges further fuel our optimism. We aim to be at the forefront of this growth. And we do so by offering a comprehensive and cost-effective platform for investors in the Middle East to access global markets and build diversified portfolios.
About Damian Hitchen
Damian Hitchen is the CEO of Saxo Bank. Appointed in 2021, he brings over two decades of experience working in the financial industry. He joined Saxo from Swissquote, where he served as CEO for Swissquote Singapore for the past two years to set up their APAC business. Prior to that he worked 6.5 years as the CEO for Swissquote in Dubai.
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