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Technology makes it easier for stock and mutual fund investors

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indians are For those traditionally big savers, investing in stocks was not a preferred option due to perceived risks and the cumbersome process of dealing with stockbrokers and managing paperwork. , the ease of investing via smartphone apps is attracting a new generation to the stock market.

For example, online stock trading platform Upstox is the second largest brokerage firm in India in terms of active customers and market share. Founded in 2009, the company reached his 1 million customers in June 2020. Since then it has grown tenfold and by May 2022 he has 10 million customers.

Number of active non-materialized accounts (Demat accounts hold financial securities in digital form and are essential for trading equities) in India to grow from around 4.1 million in March 2020 to 8.97 billion in March 2022 and more than doubled. The mutual fund industry manager has almost doubled in the last five years from his Rs 19.04 crore in May 2017 to his Rs 37.22 crore in May 2022.

Technology integration is one of the “very obvious factors” driving penetration into the retail market, said Narayan Gangadhar, CEO of brokerage firm Angel One. “Participating in the stock market has become very convenient with mobile apps and web-based solutions provided by fintech platforms. We leverage stock market solutions,” he said. Angel One has doubled its customer base since March 2021 and by May 2022 he has 10 million customers.

Most online-only stock trading platforms do not offer advice or recommendations. Vidya Bala, founding partner and head of research and product at Prime Investor, a research solutions platform for individual investors, said, It’s just a platform for trading.” “Players like Prime Investor and Value Research provide investors with recommendations and tools to conduct research.”

The capital markets include distributors who sell products such as mutual funds, registered investment advisors who provide advice for a fee, and research analysts who make product-related recommendations. And they’re all powered by technology. For example, MarketsMojo, an equity and portfolio research advisory firm, uses big data and artificial intelligence to analyze markets and equities for more in-depth, unbiased research. Covering 21 global markets, over the past three years he has achieved a compound annual growth rate of 500%. Mohit Batra, Founder and CEO of MarketsMojo, said: “Currently, we are managing his nearly $800 million portfolio and have subscriptions to his portfolio worth around Rs 600 crore. Most of these subscriptions have been made in the last two years. .”

Batra said there are two types of service providers on the market. “Discount brokering is based on the savings philosophy that investors should make as many trades as possible with the lowest possible fees. I am concerned about making money,” he said.

Despite strong growth, the market is still not fully penetrated. Batra expects to see a big surge in the next few years as people “want to know how to make money before they know where to make it or which platform to employ.”

These platforms use AI and deep learning to profile customers, research the market, and create portfolios for them. Apart from stock recommendations, we also have an analytics-based risk management system that tracks individual stocks held by our clients. Prompt clients when to sell. “With AI, we can combine temporal signals and data to provide customized recommendations,” said Gangadhar.

JarvisInvest, an AI-based equity portfolio advisory platform, went live in 2018, but it wasn’t until September 2019 that the full-scale mobile application launched. This is not a broker, but we work with 20 top brokers.

“How do you bring portfolio management services or the AIF (alternative investment fund) category to retail investors and provide a highly personalized experience for each client? We tried to fill this gap,” said JarvisInvest CEO. said Sumit Chanda,

MarketsMojo, on the other hand, wants to be an unrestricted zero-broking provider while charging a limited advisory fee.

Innovative fintech products are attracting the attention of serious brokers. “We always strive to provide our users with best-in-class products and services,” said Gangadhar. “That is why we have partnered with a fintech platform that can enhance the overall investment experience for our clients.” We offer our clients a basket of stocks or Exchange Traded Funds (ETFs). Similarly, a partnership with fintech Vested Finance helps a client buy US-listed stocks and his ETFs.

The primary users of these investment and advisory platforms are tech-savvy youth with a high risk appetite. According to Batra, about 80 percent of the investors MarketsMojo acquired over the past few years were in the group between the ages of 24 and 32. Many of these investors entered the market in 2020 and he benefited from a stock price rally that began in April 2020 and lasted until the end of 2021. Since its peak in October 2021, the benchmark stock index has fallen more than 13% of his. It remains to be seen how many new investors have the patience to ride this volatility and continue investing through periods of low or negative returns. At least some of them are likely to make informed choices, and that’s what these investment advice platforms expect.

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