How stock brokers are redefining trading for millennials using technology


The knowledge one can gain from the financial markets is infinite, and even experienced traders and retail investors find it challenging to keep track of all the developments and get every trade right.
Image: Reuters

By Prabhakar Tiwari

For many years, the Indian industry wondered what the real impact of India’s demographic dividend was going to be. As a country with one of the largest population of young people, who are usually between the ages of 18 to 35, our future is intertwined with the choices they make. If we go by recent trends, we can ascertain that both millennials and the markets benefited from market deregulations and digitization of various services. Be it capital markets, e-commerce, digital marketing or social media, the sales and branding aspects of a business are increasingly driven by the interests of millennials.

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In fact, COVID-19 has accelerated business activity within the BFSI sector, as transactions are taking place through digital payment gateways and people from all strata of society are using their mobiles for financial services. Several brokerage firms and financial institutions’ realized that they can achieve growth by drawing in millennials as new customers. Indian millennials are tech-savvy, and their affinity for smartphones is universal, immaterial of where in the country they hail from.

The affordability of smartphones and internet services, coupled with a zeal to secure an individual’s future through investing, is leading to a revolutionary change in the thought process behind personal finance. From the time that the pandemic struck, traditional market players doubled down on their digital initiatives. Nevertheless, a flurry of start-ups emerged as well, offering competitive services and prices. Their apps witnessed a meteoric rise in downloads, and a significant number of new users on such apps hail from Tier 3 and Tier 2 cities, charting a new journey for the financial ecosystem. 

Learning opportunities within market apps

The knowledge one can gain from the financial markets is infinite, and even experienced traders and retail investors find it challenging to keep track of all the developments and get every trade right. Add to this the burgeoning AI and machine learning-led applications, which are built to process global market dynamics through algorithms. These systems handle huge swathes of data across the globe, and bring forth the latest information pertaining to the market by relying on sophisticated mathematical structures. Amidst such complexities, young investors and millennials can often feel lost and disconnected, especially if they are unaware about the financial nomenclature and the instruments on offer.

Thankfully, several emerging brokerage firms and financial institutions have come up with initiatives that hand-hold new investors through different financial concepts. It offers a simplified and understandable format, starting with the basics and ending with the newest in fintech, capital market innovations, and technical analysis of the market.

Moreover, once an investor familiarizes himself/herself to the standard practices, the varying levels and modules offer a deeper understanding of the subject. The process is made easier through illustrative videos, textual content, and even quizzes. This way, learning isn’t just confined to the classrooms, and inquisitive millennials can become intelligent investors out of their sheer interest to continue learning. Further to this, millennials are able to receive instant updates on market developments at almost no cost, allowing them the time and luxury to undertake quick transactions. It is helping trade shares at really short intervals, as they can merely log onto these apps to undertake purchases and sales faster.  

Competitive pricing of brokerage services and other advantages

With the country witnessing some of the best economic growth among emerging economies in the previous decade, people’s disposable incomes are providing more bang for the buck. Due to digital inclusion schemes, several financial service providers are bent on operating at scale and bring those who have largely remained outside the financial system under its wings. Those with lower incomes could not afford the costs of investing in the markets, nor could they pay for tech-backed market insights that only wealthy investors could earlier afford. With FinTechs and tech applications disrupting the industry, competition within the system is allowing even the least common denominator to opt for tech-backed market services at very low fees and commission rates.

In fact, it is backed further by a steep decline in costs per every transaction made in purchasing or selling shares, and brokerage firms are adopting the same to compete with their traditional peers. It is an indication of where millennials are preferring to go to avail seamless access. They can get market advisory, while availing services at nominal rates. Discount brokers are offering low-cost trading platforms while offering seamless execution. They are ideal for all investors in India as they offer lower brokerage rates, reduced transaction time and superior customer experience. The new investors and traders understand how discount brokers help investors add more value to their investing behaviour. The new generation of users will only grow to appreciate the utility of these apps in bringing them closer to capital markets.

(Prabhakar Tiwari is the Chief Growth Officer at Angel Broking. The views expressed by the author are his own.)

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