How Toss is Helping Investment for Beginners

The Past Year at Toss Securities, and the Year Going Forward

Toss didn’t originally intend to set up a securities business. In the past, Toss connected users to other securities firms, so that they can have easy access to stocks or funds investment. One day, we realized that Toss and securities firms are essentially the same. In English, another word for securities firms is ‘brokerage firm,’ meaning that the company acts as a broker to connect users to investment opportunities. Toss, as a financial platform, acts as a broker to connect users to financial products. If Toss functions as a broker for brokerage firms, users would have to go through two brokers, which is inefficient. Thus, we reached the conclusion that we should open a securities brokerage business, so that users can directly invest through the Toss app.

Hence, Toss Securities was created, which started with defining problems to be solved in users’ investment experience.

We believed that we could solve all three problems.Toss was already an expert in creating a simple UX on a mobile app.We knew we could create a differentiated service, if we put some thought into making investment easier for users. As 60% of our user base is Generation MZ, we aimed to expand the culture of investment, targeting this group.

The First Securities Firm Created in 12 Years

In 2020, when Toss was busy preparing to launch Toss Securities, the domestic and international stock market was gaining traction. Individual investors started to invest after deciding that their money should not be kept solely in banks. The Toss Securities team focused on researching Toss users, millennials, and beginner investors. The team first removed anything difficult or confusing to these users, and implemented features that would help their understanding of investment. The Core system was developed with Koscom, a subsidiary of Korea Exchange.

On November 18th, 2020, Toss Securities was granted final approval from the Financial Services Commission to set up its brokerage business. This was the first approval in 12 years for a domestic securities firm. 4 months later, on March 15th, 2021, the MTS (Mobile Trading System) was released through the Toss app.

The MTS of Toss Securities clearly demonstrated that it was a mobile securities firm for millennials in their 20s and 30s, as well as beginner investors. For example, investors could easily look up stocks by the brand or product name. When you type in ‘iPhone,’ ‘Apple’ pops up. Information like ‘Top 100 Purchases,’ or ‘Top 100 Profit Rates’ based on user purchase statistics would be displayed on the screen like a music chart. Complicated information like revenue, operating profit margin, dividends, etc. would be displayed, fit for a mobile screen. Investors that save their favorite stocks would receive a notification when those stock prices spiked or plummeted.

Toss Securities’ ‘Free Stock Giveaway’ Event

As of Jan. 2022, Toss Securities reached more than 4 million new accounts. The success of the ‘Free Stock Giveaway’ event drove remarkable growth. Immediately after the launch of Toss Securities, the number of registered users increased gradually, but word-of-mouth led to over 2 million new accounts within one month of launching the service.

The event was simple. Toss Securities gave out 1 share of a random company for all newly registered users. Stocks of about 20 domestic companies, including Samsung Electronics, Hyundai Motors, Naver, and etc were given out. The purpose was to provide the experience of becoming a shareholder for those who’ve never invested before.

This wasn’t a completely new concept. Many securities firms would conduct an event to giveaway stocks or expensive prizes to users creating new accounts. However, Toss Securities’ event went viral the most, thanks to its clear strengths.

Moreover, the UX for the user to create an account for investment was easy and simple. Any Toss user could create an account through the ‘investment’ tab in less than one minute. Even if the person is not a registered user, they could easily sign up and create a Toss Securities account. The details of the event were key, too. Giving out the shares wasn’t the end of it – the event would make users want to boast about their shares to others. On the screen, a gift box image would pop up. When opened, users would see the message, ‘Congratulations! You received 1 share of Naver.’ The screenshots went all over online communities. The millennials, who actively post and share their stories online, played a key role as well. Maybe it was a coincidence, but the prices of shares Toss gave out increased, making people constantly talk about ‘Toss Pick’ shares, meaning ‘shares picked out by Toss.’

Toss Securities’ Foreign Stock Service, Easy and Accessible

Toss Securities launched its Foreign Stock service after a beta test. Like it did with its domestic stock service and many other services at Toss, Toss Securities started with listening to the voices of the users.

We did a survey on 1000 Toss users.Many were already investing in domestic stocks, and interested in foreign stocks, but still haven’t tried investing in foreign stocks. Our biggest goal was to create a foreign stock service that was easy and accessible.

The following were reasons why users weren’t able to invest in foreign stocks despite being interested in doing so, which Toss Securities took into consideration in creating their foreign stock service.

First, users were overwhelmed that the foreign stocks trading method was different from domestic stocks. Trading hours were different, foreign exchange was required, and tax rates were different. This acted as an obstacle for users to start investing. → Thus, Toss Securities would automatically exchange Korean Won when users purchased foreign stocks, and users could place orders at any time, which would be processed when the US stock market opened. The prices would be written in both Dollars and Won, which would help users get an idea of the price. Notifications were sent out to those who needed to pay taxes, such as transfer income tax.

Second, there was a lack of easy-to-understand information on foreign stocks compared to domestic stocks. People would say, “I don’t know where to find a company’s earnings announcement,” “It’s too hard to follow English news,” or “News on Tesla comes out hours later in Korea.” → Toss Securities’ Data Science Team created an AI algorithm that automatically translated articles from English to Korean. News or public notices related to certain companies were translated and provided within 10 seconds. Familiar foreign brands, and high-dividend stocks were displayed to lower the psychological barrier to invest. Users no longer had to wait 15 minutes to see the updated stock prices.

Third, the expensive stock prices of famous companies acted as an obstacle for millennials to invest in overseas markets. Millennials search ‘Amazon,’ ‘Google,’ and other famous companies, find out that stock prices go over 3 million won, and decide to invest ‘later.’ → Toss Securities launched its fractional share trading service in 1Q of 2022.

To Help the Growth of First-time Investors

Toss Securities started as an MTS for beginner investors, but ‘beginners’ shouldn’t be the ultimate goal. The number of users investing over 50 million won increased 10 times compared to when the service was launched. The next step for Toss Securities is to help Toss users become successful investors. To make this happen, Toss Securities should be a channel for users to easily find and absorb investment-related information. Users should know how a certain company generates revenue, its status in the industry, and their mid-to-long term vision, in order to be firm even when the market is volatile.

Toss Securities is strengthening its community through providing content related to investment, including news articles and public notices. Many investors search for news articles on the internet, share information through Youtube videos, have discussions in online communities, and (only) purchase stocks through the MTS of securities firms. However, Toss Securities users can find all of this info within the Toss app.

I established my own investment style after lots of trial and error. (FYI – I invest a certain amount monthly.)I also learned that there are a million ways to invest. Increasing the number of users shouldn’t be the end goal.In order for Toss Securities to grow along with their users, it should look into the growth of users and their investment behavior to suggest appropriate information and investment methods.

The ‘How to Invest’ series created by Toss Securities Analysts and Content Managers pinpoints the ‘context,’ that is not explained in articles or public notices. Many securities firms release daily analyst reports, but they’re difficult for beginner investors to access. This is because the reports were difficult to understand, because it’s targeted at institutional investors. Toss Securities is gaining a lot of attention by creating content fit for millennial investors and mobile platforms. Users are offered basic information for beginners, as well as industry reports like ‘Metaverse Explained in 3 Minutes’ and ‘Toss Securities Daily,’ which reflect the constantly-changing market trends. The article ‘I wish I bought those shares,’ released after the huge success of Squid Game and other K-dramas, received 160,000 likes.

The ‘Community’ feature is another distinct feature of Toss Securities that allows users to share their opinions with others. Users are able to take a look at others’ opinions and standards when investing in stocks, along with objective investment information. Toss Securities provides devices to increase the credibility of the user that holds certain stocks, such as putting a ‘shareholder’ sign next to their username.

In 2022, Toss Securities will launch after-hours trading and domestic ETF trading, as well as fractional share trading for foreign stocks. There are also plans to launch an asset management service based on Robo-advisors, or update features for more advanced investors. Toss Securities came into the industry with a vision to create ‘a world where investing is easy for all.’ It aims to grow with their users, by allowing them to start investing, and increase their assets through the appropriate investment style fit for each of their situations and investment style.

People tend to start investing when they hear that a certain stock price is going to increase.When the price drops by 10%, they start to find out why. But it’s already too late.When you know about the company, you can be calm even when its stock price fluctuates. Toss Securities doesn’t want to simply be a means for exchanging stock. Our goal is to be part of the entire investment journey of our users, to help them obtain information, make investment decisions, and trade at the right time.