The past 3 months have been quite tumultuous and has changed the way we live, eat, talk, work, socialize, shop & exercise. I would like to call this a black swan event, unknown & unknowable. While this change has put intense pressure on world economies it has also, to a great extent, altered the way consumers now look at markets and these are not just economic factors; but more of behavioural changes that will impact the way in which companies and clients interact.
Let me attempt to narrow down to some of these observed changes that come to my notice basis customer interaction and study of internal data:
Like never before digital adoption – more and more customers irrespective of their previous affinity are now using technology for typical transactions like shopping essentials, payments and banking, more so is the usage of the apps. According to a survey that I stumbled upon, there is a 28% rise in the adoption of internet banking and from this, the maximum shift of 33% is observed in the elderly age group (55-65 years) who were erstwhile assumed to have very limited consumption of technology
We as financial service providers are also the fruit bearers of this change, we have seen our mobile application downloads double in the last couple of weeks along with a noticeable increase of more than 50% in our digital trades, this is when the overall trade have seen a significant jump. The online interaction of the client with our systems also provides us with a gold mine of data points to use analytics and understand more into their transaction behaviour; thereby making our offerings very close to the need, which anyways have been our focus area for last couple of years. On the other side to ensure we compliment this adoption we have intensified our efforts to provide best in class experience for quick grasp of products and ease the usage on our platforms
An aware investor – from what I see, the knee jerk reaction of the markets to the COVID situation has had two very clear impacts on the customers, one, it has acted as a wake-up call for existing investors and made them far more vigilant of their surrounding developments thereby getting them to be equipped in taking necessary steps to ensure that their portfolios are aligned as per the situation. Second, it has also attracted a lot of new audience to participate in the markets and seize the opportunity of investments in great businesses available now at a great discount. Owing to this phenomenon we have not only seen a huge upside in sales; but also an extensive usage of our review systems by the customers themselves, trying to understand their portfolio in detail, we saw more than 30,000 reviews taking place in the last 2 months alone. Not only this, we have also had an huge increase in the amount of advisor customer interactions, clearly showing the willingness of the consumers to acquire more and more information aiding them to take informed decisions
High content consumption – with time at hand, high amount of internet based information & an inherent interest, investors now are expecting their financial service providers to facilitate them with every detail to navigate through volatile times and plan for future capital appreciation. Clients expect companies to help them understand the nuances and thereby to navigate through the so-called ‘financial jungle’. To facilitate this - we started daily webinars across various topics to help clients become better at managing money. I am very happy to share that we saw a whopping 50,000 plus clients participate in our webinars. We have also stressed a lot on “do it yourself” communications to our customers to ensure that every bit of information about systems / products / processes reach out to them via easily consumables videos and texts, equipping them with right tools and technology helping them in taking the most viable decision.
Holistic outlook is the future – it is quite evident that a lot of customer portfolios have taken a good amount of beating during these unprecedented times. While these happened, investors who were less diversified took an even bigger hit and giving them a wakeup call to be more holistic in planning for wealth creation by investing in diversified financial instruments. I am able to state this basis the data from some of our systems that provides customers with well diversified and all-round investment options across asset which has seen a more than 100% jump in usage month on month.
Key Insights:
Though Nifty is down from pre-covid levels of 11,200, overall retail participation has increased in terms of Cash ADTO, client activity and new investors coming into the market.
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Increased volatility in the markets, strong bounce back across global markets and many people under Work From Home having time to trade through digital platforms are key catalysts for strong growth in the equity markets.
F&O ADTO has gone down from pre-covid levels, we expect strong growth in the F&O segment from June on wards, due to new exchange margin norms for derivative segment, wherein the margins for hedged positions are 30-50% less than current margins. This will open up opportunity for professional traders doing option strategies with protection.
To sum it up, I would like the state that these unprecedented times have made the customers more aware of their investments and also non investors aware of equities being a very important alternative to their investment mix. I am also confident that we are entering into a world which will have more and more customers asking WHY.