Survival of the fittest: Stockbroking industry growing through challenges

The crisis that Indian capital markets faced in 2009 was more of a borrowed recession, in the sense, the subprime crisis in the US snowballed and jolted India – along with much of global markets –through financial, trade and confidence channels.

Domestic demand was not a major worry in those times. In comparison, the slowdown India is witnessing currently is on the consumption side and the reasons are homegrown. A lot of policy actions have been initiated in recent weeks to arrest the slowdown.

And the festive season showed a bumpup in volumes, which is good news. To boot, the festive season in India accounts for almost 35-40 per cent of annual sales of most consumer-facing companies.

Between 2009 and 2019, India’s stockbroking industry has witnessed huge technological changes and evolved. Turnover on the exchanges, investor participation and equity penetration have all increased astonishingly. The slide in yields for stock brokers have been more than compensated by the introduction of newer products and ever-growing participation.

In the new evolved stockbroking industry, undoubtedly there are numerous challenges at the moment. But the critical issue is to utilise those challenges to grow through them. Most stockbrokers have transformed themselves and entirely reorientated their thinking and attitude to a level that goes beyond their operational framework.

A wave of innovation in the financial servicesNSE 1.05 % industry, led by an ever-increasing army of fintech startups, is disrupting traditional stockbroking houses. The rise of the internet followed by the ubiquitous use of smart devices has interrupted the industry by enabling creation of platforms that allow traders to trade in instruments from anywhere with ease and at lower costs.

Discount brokerages have used mobile and internet technology to their fullest potential to provide completely online services and reduce cost drastically. Undoubtedly, technology has improved the nuts and bolts of how stocktrading works. It has reduced the hassles and costs of investing in the stock market to a great extent. This technology adoption in the financial service space is only expected to intensify further in the days to come.

[“source=economictimes”]