Name: Joel LarishTitle: Chief technology officerCompany: StakeCommenced role: April 2019Reporting line: CEOMember of the executive team: YesTechnology Function: 35 staff, 8 direct reports
Looking to grow in the competitive and crowded Australian retail investor market, digital brokerage app Stake realised the best path to success was not only to rely on new entrants but rather to woo those with existing portfolios.
Stake launched a $3 trading offering at the start of 2022 – which it claims was the most competitive pricing at the time for Australian investors with a Holder Identifier Numbers (HIN) on the Australian Stock Exchange (ASX).
However, it recognised that at the time of launch, there were already vast numbers of retail investors in Australia with ASX listed securities already – at least 1.5 million worth, many of whom joined the market on the back of COVID-19-related volatility in 2020 and 2021.
“We therefore couldn’t rely on only new entrants to the ASX market to fuel the growth of this product after the COVID influx died down,” Stake’s chief technology officer Joel Larish tells CIO Australia.
“It then dawned on us that growth via share transfers was critical, and that we could reinvent the clunky, manual and broken experiences that have traditionally been the norm in the industry.”
Fully digital share transfer
The company decided to win market share from its competitors, it needed to build a best-in-class share transfer channel.
“We introduced the first ever fully digital broker-to-broker share transfer process for ASX-listed stocks,” says Larish.
The app enables investors to move shares to Stake from other brokers, such as large banks, by submitting an application within the app without printing any paper forms.
“Prior to this launch, all other brokers required you to print out documents and manually fill in holdings, HIN details and signatures. These forms were traditionally submitted by scanning documents and insecurely attaching them to emails,” says Larish.
Electronic agreement tools such as Docusign cannot be used in this process as there is a legal requirement for “wet ink” signatures for share transfers to be accepted by the receiving broker, he adds.
“Stake allows you to sign any blank piece of paper via a wet ink signature and it superimposes this on the transfer form.”
It also provides customers with notifications on how their transfers are progressing in the broker-to-broker process lifecycle.
“These notifications have helped create a seamless process and demonstrates that Stake prioritises our customers feeling safe and secure,” says Larish.
In the 16 months between January 2022 to May 2023, $450 million worth of ASX-listed shares have flowed into the Stake platform from other brokers through the digital transfer process.
“We were able to build this process with only a small team of three engineers, however, this has structurally changed the rest of the organisation in two ways: marketing and operations,” says Larish.
From a marketing perspective, Stake started offering $0 ASX trading – reduced from $3 for other customers – when investors successfully transferred shares from another broker.
“We knew we had just opened an additional channel of acquisition and decided to fuel this even further,” says Larish, adding that customers who referred their friends or family were also eligible for brokerage discounts.
“We created a cycle of acquire-convert-refer and had given the marketing team a diverse set of channels to pursue growth in our customer base.”
Operationally, building the transfer process into the application led to efficiencies, says Larish.
“We were able to show both customers and our operations team real time status updates and notifications on the status of customer transfers,” he says.
“Since some of our competitors were suffering two-week delays in being able to manually transfer customers’ holdings, status updates were something we wanted to communicate to all involved.”
Stake now has what is widely considered to be the best operational broker-to-broker process in the industry, says Larish, adding it currently has a patent pending for this process.
This achievement is a significant turnaround for an IT team, which was on the verge of being outsourced in 2019.
“With the founding CTO and engineers leaving the business, Stake’s board had committed to deprecating its existing platform and to instead partner with an external financial services provider for future development,” says Larish.
“My role was to assist in this transition and to build out a business insights function within Stake. As time progressed, I soon became concerned about outsourcing our technology stack to partners who were not involved in the day-to-day operation at Stake. In my opinion, the backend is the lifeblood and ‘smarts’ of any technology business.”
So, Larish started to advocate for the need for the company’s technology stack to remain inhouse.
“My first level of influence was to show by doing. I learnt the entire technology stack and alongside an engineering intern, we were able to start rapidly iterating on product development. Within three months, we had launched US equities to UK customers.”
Soon enough, Larish had moved into the CTO role and convinced Stake’s management team to hire more engineers to meet the demands of customers.
By late 2020, the founders and board gained enough confidence in the technology team to abandon their outsourcing plans, and Larish now runs an engineering team of 35, and recently also took on remit of product moving into a CPTO role.
Louis van Wyk