By: Arun Chaudhry, Director & Chief Business Officer, m.Stock by Mirae Asset

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Technology has changed the pace of business and raised customer expectations to a very different level. It has introduced significant changes in the way people communicate, live, and work. In fact, in a post-pandemic world, the rate of change has really picked up in an unprecedented manner. When it comes to investing and trading, technology has often been recognized as an enabler not only for business, but also for the customer. From instant onboarding, availability of information at fingertips, customized platforms, to crunching millions of data points to get the right algo in place, all of it now just takes seconds.

The industry is booming, and the kind of interest we have seen from customers towards investments and trading is unparalleled. I don’t think this could have been possible if it wasn’t for tech-enabled trading systems that have emerged in the recent past. In the last 2 years alone, the industry has added more than 4.9 crore investors, which is about 54% of the total base we have till now across NSDL & CDSL. 

Even if you look at the number of active customers, there is a similar encouraging story. Out of 3.6 crore active investors, more than 70% were just added in the same period of the last 2 years. From a business standpoint, enabling millions of orders that are being executed at the very same second, dealer connectively (from home) for more traditional advisory driven businesses could only be made possible since we could use technology, which not just facilitated business continuity during COVID, but also propelled unparalleled growth.

And this is just the beginning!

Internet adoption India is growing by leaps and bounds. According to the IAMAI-Kantar ICUBE 2020 report, the number of active Internet users in India is expected to touch 900 million by 2025. Moreover, the cost of data consumption on mobile phones is falling to level never imagined. It is a well-known fact that globally, India offers one of the lowest mobile data tariffs, that cost somewhere around $0.68 per GB on an average. This, in addition to the un precedented effort from the Government of India to boost digital infrastructure will propel this country of 140 crore people, to become a huge consumption hub with citizens becoming ‘time poor and money rich’. Recently, we have seen this in equities, where the portfolio of equity investment in the domestic saving increased to 4.8% of the total domestic savings, this penetration is the highest we have ever seen.

Let’s look at what technology has got to the broking industry:

Speed

One of the major advantages of technology that the investment industry can ride on is speed. Best-in-class user interfaces, aided on-boardings, a very intuitive user platform and order processing speed like never-before. Today, opening a brokerage account is as easy as sharing your mobile number. A testament to this claim is our recently launched trading platform - m.Stock by Mirae Asset, that enables a user to

open an account within a few minutes, and in a fully digital manner. Given its superior technology stack, the platform can process thousands of orders per second, and offer customers with an uninterrupted trading experience

Easy Access to Information

The biggest benefit of the internet is the wide availability of information. Before the advent of the internet, a retail investor had to visit the local library to read about financial instruments, and research companies and securities in detail or else rely on someone to provide TIPs for investment. Moreover, investment decisions were primarily made basis company turnover. The internet allows investors to read a certain company’s financial data online which is presented in a crip format through a 2 min video. It barely takes a few seconds to download large financial documents that can then be analyzed for smarter decision making and there are auto ready tools saving human effort to go through the document him/herself. In fact, digital broking platforms themselves are walking that extra mile to offer regular advisories, stock notifications and related news to investors on a regular basis that can be validated at the click of a button and can be actioned upon instantly. This easy access to information has put the control back in the hands of the customer.

Alternate Channels of information

It is pertinent to note, that In India, the number of social media users in 2020 stood at 518 million, and this number is expected to reach 1.5 billion by 2040.[1] Given this scenario, social media too, is set to play a crucial role in investment decision making. Retail investors are increasingly relying on social media dialogue, video testimonials on YouTube, conversations within online investor communities and more, to identify market trends and take prudent calls. This in addition to financial intermediaries themselves taking to social media to ensure advice and information is disseminated in places where the client wants to consume the same.

Robo Advisor Platforms

Online trading is on the verge of replacing fund managers with Robo advisory platforms. Robo-advisors, offer financial advice and limit human interaction. This combination of services is becoming increasingly appealing, thanks to millennials’ and Generation Z’s ability and preference to handle their finances online, the pandemic-driven shift to virtual interactions with advisors, and an increasing interest in investing in novel assets like equities, currencies, options and more.

Conclusion:

It has become evidently critical for every broking entity to leverage the latest technology to ensure that they can keep customer servicing costs at an optimum level and at the same time, ensure that the best possible customized experience is offered to every client the way they want to consume. Additionally, whether it is customer excellence centers, back-office systems or even trade processing units, organizations are working to ensure that they bring in technology to handle tasks in the most optimum and cost-effective manner, thereby creating a moat for business, and at the same time, ensuring that the client gets the benefit of these implementations.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)