29 July 2014

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David Strachan - DRS Advisors LLC

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Finance 2.0

A community for discussing the application of Web 2.0 technologies to financial services.

Financial App Resurgence

19 June 2011  |  5173 views  |  0

For years the quality of Facebook financial applications has left a lot to be desired.  With a few notable exceptions - Fantasy Stock Exchange, for example, which went on to become KaChing and now Wealthfront - finance apps have been largely entertainment-oriented, unstable, and unsupported.

The tide seems to be changing with the introduction of two applications in recent weeks.  Loyal3, a social media-based transfer agent, offers customers the ability to buy shares in companies for as little as $10 through a "Customer Stock Ownership Plan" or CSOP.  Unlike an ESOP, which is designed to incentivize employees, the CSOP is essentially a stock-based customer loyalty program, the idea being that customers will be that much more loyal if they own a piece of the company.  There are no fees for the customer, as Loyal3 charges listing fees to interested companies.  The Loyal3 Facebook app enables customers to buy and sell fractional or full shares directly from their Facebook account.

Social discount broker Zecco recently launched Wall Street, an app which provides real-time stock quotes, charts, and trading via Facebook.  Users can "like" stocks, share comments and feedback via their wall, and place trades in their Zecco account.  The interface is clean, the functionality is smooth and robust, and the content relevant.

We wonder if these moves signal a new interest in Facebook as a distribution channel as opposed to simply a marketing medium.  We have maintained for some time that the sheer scale of Facebook can hardly be ignored in terms of its potential for financial services.  And with the SEC potentially allowing small companies to raise capital via social networks, we believe Facebook is a ready-made platform for disruption in corporate finance.

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name

David Strachan

job title

Senior Managing Director

company name

DRS Advisors LLC

member since

2007

location

Maryland

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I am the founder and Senior Managing Director of DRS Advisors LLC, a boutique advisory specializi...

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