Advancement of technologies in digital broking and its impact on investors’ behaviour

Mrs Sharma, though a commerce graduate, had been content in her role as a homemaker till her husband’s flourishing business in the travel and tourism sector went into the red during the pandemic years. It was more out of necessity than by choice that she took her sister’s advice and started investing in stocks. Thanks to technological advancements that the market went through over the last several years, not only did she manage to run her family during those difficult times, the lady continues to earn handsomely even today.

This was possible as she received support from a ‘Digital First’ fintech platform that actually did the hand-holding as she passed through the complex labyrinth of the financial market, guiding her at every step. Fintech platforms such as these believe in the 3E approach that entails education, enablement and experience. In-depth investor education is crucial if the likes of Mrs Sharma are to be enabled and provided with that level of experience.

Fintech firms believe in providing research-based recommendations supported by Artificial Intelligence (AI) and Machine Learning (ML) to help the investor make an informed decision. At the same time, there is that ‘human’ feeling brought about by a strong customer experience team. Technological advancement is no longer an option. It has now turned into an essential with more people going in for financialisation of their savings and assets. Not so long ago, 80% of people invested in real estate. Gold was the second choice followed by financial assets. The pandemic taught people a vital lesson – financial assets are of greater value during a crisis than physical ones. Technology has certainly helped investors in taking this decision.  

AI has now changed the way the investor thinks, providing him/her with more options. It has emerged on the scene, ensuring to help people invest and manage their wealth. A maneuver to keep ‘your wallet in use while you walk’ and turn you into a man/woman of the present century.

Generative AI can study and analyse vast datasets, including customer profiles and market trends. This helps in identifying the requirements of every individual customer. Gen AI makes accurate risk assessments and provides customers with tailor-made solutions, depending on their risk tolerance levels. This has helped in a new generation of investors, such as homemakers, retirees and even students entering the market. They have little or no prior experience and cannot study trends. Fintech companies, supported by General AI (Gen AI), meet their needs through a guided process, thus creating a novel experience that they can then share with others.  

The financial sector in India has witnessed remarkable advancements over the years, driven by the rapid integration of technology into every facet of the industry. From mobile banking and digital payments to robo-advisors and algorithmic trading, technology has played a pivotal role in making financial services more accessible, efficient, and transparent.

The future of financial services in India will be shaped by the use of data-driven decision-making and the democratization of financial markets. Investors now have access to real-time market data, news, and research, which has increased their confidence in their investing decisions. Investors may now trade from anywhere thanks to mobile trading apps, which have increased trading activity. Robot advisers and algorithmic trading platforms, for example, provide tailored risk management and investment strategies through automated investing.

Investors can tailor their portfolios based on their objectives and risk tolerance thanks to digital broking platforms, which offer a better user experience. Data analysis and market trend identification using AI and machine learning enable data-driven judgments. The advancements made fintech companies include AI-driven investment suggestions. A popular finance robo adviser in the wealth front is now the talk of the town. It simply probes a person with a few questions and then creates a financial profile that helps in deciding where to invest. In days to come, fintech companies will invest more in technology to provide that additional support to customers. This will ultimately help the market by ensuring a steady flow of knowledgeable investors. At the same time, there will be impetus on creating better experiences through that subtle human touch.

The author is Associate Director of Growth, Brand and Communications, BlinkX by JM Financial (Views are personal)