"This is where people are spending more of their time," said Sunayna Tuteja, director of emerging technology and innovation at TD Ameritrade. "A lot of public research has shown the growth of messaging apps overall and how it has a dominant presence."
The Omaha, Neb.-based brokerage firm has 200,000 clients on Facebook, many of whom use messenger to discuss trades and get real-time quotes, updates and news on Facebook, she said.
The bot was developed partly through the company's employee hackathons and was launched within three months.
The chatbot was launched in August, but at the time, the artificial intelligence capabilities were limited to reviewing market stats and news and watching videos and content about investing.
Trading in messenger is now similar to using the company's website or mobile app since all the data run via TD Ameritrade and are secure.
The chatbot mimics human behavior and is conversational, asking the investor if he or she wants to conduct a trade and answering questions about how limit or market orders function. The artificial intelligence behind the bot works with both new and active traders.
"Entering stock markets can be daunting and this will help to start to break down barriers," said Tuteja. "Investors can empower themselves and be more confident. The bot will respond to you in seconds."
Traders can also switch to speaking to a human via messenger before they conduct a trade. The employees are all licensed traders.
Many of TD Ameritrade's clients are casual, retail investors who want to allocate more time to their retirement portfolio and personal finances, she said.
"We are the only company that is offering investors the ability to trade within FB messenger and traders just want more choices," Tuteja said.
But not everyone is a fan. Trading through Facebook messenger is not appealing, said Miami-based trader Jason Spatafora.
"Call me a purist, but while I'm trading I'd rather stay put on my platform rather than go on Facebook," he said. "The temptation of being distracted by that friend that you quietly mock for just taking selfies or the occasional sob story about a dog that saved a hippo that pops up in your feed is just too great of a distraction. Even if that portion is segregated why be so close to the biggest distraction in the world."
Traders are increasingly turning to trading via their smartphones to buy and sell stocks, not only because they are becoming more comfortable with trading in this manner, but also because having a secure network and encrypted data makes the use more commonplace.
Investors are avid fans of trading directly from an app and TD Ameritrade launched its iPhone app in 2009, while the Android version was available in 2012. They can trade on various devices such as their laptop, iPad and Apple Watch, which allows real-time synchronization to avoid any delays.
The technology behind stock apps has improved. Since they require only low bandwidth, the launch time is shorter the second time they access it, which is vital since many smartphone users want to take immediate action and they spend less than 30 seconds conducting a trade, says John Hart, managing director of trading products at TD Ameritrade.
"A typical trader's behavior is to log-in during the morning and when they come back to trade because there is a news event, they will want to get back in immediately," he said. "This reduces barriers and investors can get data as fast as they can, often only a second and a half."
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