The butterfly flapping its wings to a hurricane is an oft used analogy for change. And so, after almost 20 years of the internet becoming mainstream, will we now also start seeing the end of commissions payable on financial products. In the past month almost unnoticed, a seismic shift has occurred when the dominant Charles Schwab boldly ended charging commission on trades. Suddenly competitors were forced to adapt and a new normal was established. This change has taken almost 20 years to reach this stage.

Sellers of financial products for years managed to maintain the perceived need for fees to intermediaries. But in a single move, Schwab has signalled the future of financial services not only in equities but eventually across all asset classes including Deposits. The days of the empowered and informed buyer is closer and technology (such as bots and AI) will ultimately eliminate commissions to intermediaries. This is true in the Term Deposit space where the cost of intermediaries is less defensible in a low interest rate environment.

Digitisation in the short-term funding market has been the laggard with very little innovation and competitive solutions for a long time contrasted with lending markets where a plethora of solutions exist. In the Australian context, this has been compounded by customers reluctance to compare and change banks and it is no wonder that depositors probably lose more than $6bn interest annually. Unconflicted platforms like Likwidity simplifies the process for depositors and investors to seek additional yield and ensures that a level playing field is created for customers as well as banks. After all, that is the essence of the technology in financial services. It’s time to rethink how returns on your funds can be enhanced without the hidden commission costs. Likwidity offers the only Unconflicted Zero Commission Deposit Platform. This means that you get a commission free interest rate with Likwidity.