Discount Stockbrokers Turn to Apps to Wean Indians Off Gold

Discount Stockbrokers Turn to Apps to Wean Indians Off Gold
In India, where gold is the investment medium of choice, low-cost stockbrokers reckon they can grow the paltry percent of households investing in shares with apps that make it as easy to buy stocks on a smartphone as it is to buy gold on a highstreet.

India is one of the world's biggest gold consumers as millions looking to grow income have traditionally headed for the nearest jeweller. But gold's reputation as a safe store of value has been tarnished by a 42 percent drop in prices over the past four years and an equal rise in stocks.

Even so, less than 1.5 percent of households put money directly into shares, compared with around 10 percent in China and 20 percent in the United States. Online brokers Zerodha and RKSV aim to narrow that gap by taking advantage of India being one of the world's quickest-growing smartphone markets.

"Our goal is to turn the younger generation, who are connected to the Internet for the first time on their smartphones, into investors," said Nithin Kamath, co-founder and chief executive of Bengaluru-based Zerodha, India's largest low-cost broker, which is currently testing a new app.

zerodha_app_screenshot.jpg

Full-service brokers, the more commonly used intermediary in India, offer apps that make up a sliver of trading volume. Cut-price brokers aim to raise the numbers by making apps more user friendly and charging as little as Rs. 20 ($0.3) per trade.

"Mobile apps have been around but they just don't work as advertised. We have redone our app from the ground up, which will get people to actually trade on their phones," said Kamath.

Brokers have struggled for growth since the 2008 financial crisis, even though stock prices have long since recovered. An estimated 600 closed since the crisis, including heavyweights such as the retail broking arm of HSBC Holdings PLC .

"Discount brokers have not only been able to add clients at a good pace but ... their clients are almost twice as active" as those of full-service brokerages and banks, said analyst Karthik Srinivasan at researcher ICRA.

Mumbai-based RKSV plans to release a new app that it hopes will help grow its customer base 10 times from the current 25,000 users in five years.

"We are going mobile-first and that's going to be the big differentiator for us compared to old-school brokerages," said co-founder and chief executive Raghu Kumar.

"We don't think of ourselves as discount brokers. What we are doing is using technology to make trading more accessible."

© Thomson Reuters 2015

Comments

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Further reading: Apps, India, Internet, Zerodha App
Meet US-Based App Developers Who Are Going India-First
New Technique Can Reveal Age of Moon Rocks

Related Stories

Share on Facebook Tweet Snapchat Share Reddit Comment
 
 

Advertisement

Advertisement

Advertisement

© Copyright Red Pixels Ventures Limited 2022. All rights reserved.
Listen to the latest songs, only on JioSaavn.com