Digital Transformation in Finance -Blog by Mr. Motilal Oswal

Digital Transformation: Your Finances and Technology go Hand in Hand

The country recently marked the 25th anniversary of economic liberalization with all the fanfare the landmark event deserved. A plethora of 'then-and-now' stories are being narrated on various forums, with people from all walks of life recounting hardships faced by them before the tectonic shift a quarter century ago changed their lives forever. A recurring grievance, in many of these fascinating tales is the harrowing drudgery of queues – literal and metaphorical – at ration shops and banks as well as for gas and telephone connections. Today, most of these transactions can be carried out online or over the phone – the mobile phone, to be specific. The Internet has transformed the way we carry out routine transactions and mobile internet is now taking transactions, particularly trading and banking, to a new level altogether. This ‘virtual’ transformation is a product of the information technology revolution, which has its roots in the wave of reforms that swept the country 25 years ago. Rapidly increasing use of smartphones has resulted in mobile trading quickly establishing itself as the trading mode of the future. The average daily NSE cash market turnover from mobile trading has shot up to Rs 600 crore from a little over Rs. 100 crore two years ago. Its share in total NSE turnover now stands at 3.32%, from merely 1% earlier. The spurt in Internet and mobile trading is amply backed by an equally far-reaching technological makeover witnessed in the banking industry, as Internet and mobile banking platforms sprint ahead of traditional modes. The ease and transparency of investing through internet trading coupled with reduced brokerages have taken the market capitalization of Indian firms from pillar to post, many of which now exceed their global counterparts. In 2010, merely Rs 7,65,271 crore were transacted through internet trading platform, which today holds a bulkier pie of 24% at Rs 1,025,706 crore worth of transactions during 2015-16. While dematerialization was the game-changer for the stock trading arena in the 1990s, AADHAAR looks set to replicate the feat for mobile and Internet trading in the coming days. E-KYC has already reduced the turnaround time for opening trading accounts to 15 Mins from 3 days earlier. Going forward, Aadhaar-based e-KYC will play a pivotal role in widening the trader base, as investors even in smaller cities join the tribe, buoyed by an improvement in accessibility, convenience and speed. Such technological tools have comes as a shot in the arm for traders who have minimal dependence on the broking house for its execution services. Armed with sound knowledge and new-age tools, many investors and traders are carrying out transactions on their own. In fact, individual investors startled everyone with their unique behaviour of staying calm during the turmoil in equity markets last year and parking additional funds. Instead of panic withdrawals through the downward spiral, they invested large quantum of money in mutual funds and other equity-linked investments through life insurers. </p>  <p>Even investors, who have bestowed faith in us and invested through our mutual fund arm, have always been awed with the ease of online transactions in the mutual fund schemes from the Motilal Oswal stable, which have been leading the pack due to the expertise in picking winning stocks for nearly 3 decades. For highly sophisticated retail and HNI investors, algorithmic trading apps and quantitative trading tools have become a huge draw. In June 2016, algorithm-based trading accounted for close to 16.5% of the overall NSE cash market turnover. These highly advanced technology-intensive trading tools increase accuracy and reduce costs, translating into better returns and service quality for clients. Given this backdrop, the stage is now set for a complete digital transformation in the financial services space, as a combination of strong economic growth prospects, deepening Internet and mobile penetration, rising awareness levels amongst retail investors and the government’s thrust on the Digital India program catapults it into a different league altogether in days to come. At Motilal Oswal Securities we have kept pace with technological innovations and used them to make investing easier for the end user with means such as mobile, SMS trading and terminal trading. We understand that users switch devices during the day from smart phones at home or laptops while raveling or even desktops at workstations and our online platform is built such that it can be accessed through any of the devices to trade seamlessly. About Motilal Oswal Securities Ltd, Supporting Digitalization. Motilal Oswal Securities Ltd. has been constantly leading the pace of digitalization. Our mobile trading app has seen over 1.2 Lakh downloads since its launch in Nov’15 and counting. Competitive features like superfast trading, multi-asset watchlist with real-time quotes and advanced charts, recommendations across asset classes and real-time portfolio monitoring tools have complimented the growth of our Application and resulted in doubling the number of clients trading from app on a daily basis from only about 2,000 clients to 4,100 clients within a span of 8-9 months. Investor friendly tools like Portfolio Optimizer, Portfolio Restructuring that suggest customized recommendations related to the clients portfolio and are gaining popularity day by day. Short term traders can benefit from tools like Trade guide signal, Option Decoder, etc. which provide suggestions based on past movements of the stocks. We are seeing over 10 lakh monthly online trades, with the daily online turnover crossing Rs 2,483 crore. Its growing popularity is evident from the fact that a year ago, these figures stood at 5 Lakhs and 1,173 crore respectively. We also are the pioneers to launch the Smart Watch App for our trading application. In January, we became the first brokerage house to offer a completely paperless, e-KYC-based online trading and online Demat account facility – if you have an Aadhaar card & PAN Card, your trading and Demat account can be opened within 15 minutes also allowing you to trading immediately without having to submit any physical documents. About Mr. Motilal Oswal: Mr. Motilal Oswal is Chairman & MD of Motilal Oswal financial services. He started the business along with co-promoter Mr. Ramdeo Agarwal. By profession he is a Chartered Accountant. He has a passion in reading books based on leadership, management & Self-Motivation. He has also authored two books on quotations namely:  The essence of Life & The essence of Business & Management. He has also published several articles in financial magazines and newspapers.


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