After banking and shopping, people are now getting increasingly comfortable with equity trading through mobile-based applications or apps. Mobile trading has become an important focus area for brokerages from early this year when equity markets first started showing signs of a turnaround.
Average daily turnover through mobiles has increased 2.5 times to Rs 221 crore as of November from Rs 88 crore in January on the National Stock Exchange (NSE) and the BSE.
While this is a sharp jump in cash turnover, it accounts for less than one per cent of the total trades in the market. Sector officials, however, are taking this segment seriously, as the volumes through this route are expected to show exponential growth.
“Thanks to the presence of e-commerce retail players like Flipkart and Snapdeal, the app-culture is catching on even in smaller towns. Though the major chunk of the mobile trading revenue still comes through the larger centres, the smaller centres are fast catching up,” said E Prasanth Prabhakaran, president, IIFL.
Total daily average turnover for the cash market stood at about Rs 22,000 crore as of November 2014. Equity markets have so far this year given returns of almost 30 per cent. From sector estimates, revenue through mobile trading contributes between five and 10 per cent of the total income of brokerages.
“About 10 per cent of our income comes through mobile trading now. The need for increasing our physical presence has come down to a certain extent though we still have ‘points of presence’ for our clients,” said
A Balakrishnan, chief technology officer at Geojit BNP Paribas Financial Services. Among the top brokerages in the country, applications developed by bank-promoted brokerages find higher favour among traders and investors.
This is followed by HDFC Bank, Geojit BNP Paribas and IIFL apps, which have a little over 50,000 downloads each. Angel, Motilal Oswal and Edelweiss apps have been downloaded more than 10,000 times each.
Sector officials said a large number of investors were still not comfortable with placing trades, limiting their activity on the app to checking prices and viewing intra-day moves.
But players believe the discomfort will soon be a thing of the past, as brokerages are working hard to improve the mobile experience. This year, unlike the previous stock market boom in 2007-08, brokerages did not physically expand reach. On the contrary, they reduced their offline presence and have been exploring the mobile and online platforms.
Firms are spending a large chunk on their mobile app development department and hiring talent to develop faster and more secure apps with added features. One broker said the advent of smarter phones and tablets and improving internet data speed will dominate app development.
“The ease of the application will drive the volume and the availability of more and more financial products. People are slowly coming out of their comfort zone and doing more trades through mobile apps,” said Yagnesh Parikh, chief technology officer, ICICI Securities.