(Source: Angel Broking)
Suddenly, there has been a spike in millennial trading across India. With it, the participation of our millennial generation within the securities and commodity market has been rapidly increasing. This trend is driving the daily volume of our bourses to fresh highs – even at the times of market volatility. But what is driving millennials towards trading all of a sudden? Perhaps, the change is not sudden after all.
The ‘M’ Way: Money, Millennials, and Mobile
Millennials are more inclined towards technology as compared to their predecessors. So, it is natural for this penchant to also reflect in their investment habits. Mobile phones are perhaps the main reason why millennials are joining the market in large numbers. It is empowering them to receive stock tips, research, and advice in real-time to flexibly take relevant calls. Millennials now also comprise 64% of the active workforce in India. Their gradually increasing share in the workforce is further contributing to their higher participation in the stock market.
Smartphones: Eliminating the Barriers to Entry and increasing flexibility
Today, smartphones have eliminated several barriers to entry for regular retail investors in India. For instance, a prime reason for the stock markets to stay confined to the urban regions earlier was the challenge of accessibility. An interested tier-2/tier-3 investor had to go through several bottlenecks before joining others on the trading floor. In remote regions, it could even be something as small as getting an internet connection or facing the intricacies of labyrinthine paperwork. All such challenges have been resolved with smartphones and tech-driven processes, thereby enabling more investors to tap the equities market seamlessly.
Reducing Costs with Economies of Scale
With higher footfall, the brokerage firms are also better positioned to then pass on the benefits. Such benefits are coming in the form of discounted brokerage fees and flat charges for their customers. They empower an investor to make quick decisions and shell out less money on brokerage fees. Flat charges, moreover, streamline the overheads in high-volume trades by significantly reducing the brokerage fees.
Artificial Intelligence and Data Analytics
Industry-leading players are at present leaving no stone unturned to maximize the profit of the millennial investors. And, they have deployed ultramodern technologies to achieve this objective. For instance, nowadays, leading investment engines compute over 1 billion data points before extending a piece of advice to an investor. This is while maintaining a high degree of personalization including preferences and risk appetite of the individual. The approach has enabled investors to enjoy a multifold yield in comparison with benchmark indices. Personalization and superior customer satisfaction is further maintained by them via Artificial Intelligence.
These are the main reasons why millennials are progressively preferring to trade via their smartphones. As brokerage platforms expand their footprint in tier 2 and 3 cities, the trend is perhaps only going to snowball in the near future.