Like most e-commerce initiatives, a lack of user faith in Internet security procedures is hampering online stock trading, according to the Gartner Group.
The organisation recently conducted a US survey on Internet stock trading issues and found that fewer than 4.5 million Americans (about 2.5 per cent of the population) are actually buying or selling stocks online.
In Australia, according to Bruce McCabe, Gartner Group's research director, that figure drops even further to around 1.5 per cent of the local population who currently engage in virtual trading.
The US survey found that 45 per cent of respondents didn't see the advantage of online stockbroking , while another 34 per cent cited security and privacy concerns as the prime inhibitor to its successful take-up. While that feeling, according to McCabe, is also prevalent in Australia, he said the market for online broking will mature alongside increased end user awareness of the practice .
"The key is not to confuse the potential with the stage the market is currently at because it's still very early days. The comfort levels with security aren't there yet with consumers. Also, the education level about the potential of online business is also very low . . . and companies like [online broker] E*Trade aren't on top of the minds of people who are dealing in stocks, but I believe that will change very rapidly."
The report said online investing is still "in its infancy" but would follow a growth pattern similar to that which occurred in online banking, and which exploded after banks simplified the process.