Ironically, 2020 will go down as one of the most memorable years in history. If one was to find a silver lining, we are in the wrong year. Nothing has shaken up people’s comfort zone more than seven months of this year alone, and normalcy (as we know it) is nowhere in sight. On the one hand, many white-collared professionals had the privilege of working from home, but on the other, many lost their jobs or had to endure a significant cut in their salaries. But in this time of financial uncertainty, a surprising trend that emerged is that the number of new Demat accounts opened in 2020 is the highest for any year! A demat account is an online portfolio that holds a customer’s shares and other securities. Groww alone opened close to 4.5 lakh Demat accounts since it launched stocks in June. So what are these new Demat accounts doing, you wonder? The short answer is that they are trading big time on mobile. Consider this – according to BSE’s trading data, the percentage of trades on mobile since March this year have more than tripled in September. In April alone, there was a spike of more than 140 percent in mobile trades on the BSE. Mobile transactions now account for close to a quarter of the cash market deals on the National Stock Exchange (NSE).
Three factors contribute to these developments – Firstly, the coronavirus crisis has created an opportunity to buy many otherwise high-value stocks for cheap or pick up shares that are likely to benefit from a post COVID-19 scenario. Secondly, with a large section of office-goers working from home, they have more savings, more time to learn how to invest, more time to analyse companies, and more time to invest more frequently. The COVID-19 crisis has been a wake-up call for many millennials that life is uncertain, and in addition to physical health and mental health, financial health matters too. Thirdly, apps like Groww have made investing easier, faster, and transparent for the DIY (do-it-yourself) generation, removed hurdles with paperless onboarding, addressed cost concerns with very low brokerage*, and brought all types of investment options on a single platform. It is akin to what Flipkart and Amazon did to the online shopping experience, or Swiggy and Zomato did to the restaurant-ordering experience.
“When it comes to investing, technology has been the biggest game-changer. India’s young population and young urban millennials are avid users of online shopping, digital streaming, and social media. For users in this era of instant gratification, investments cannot take days to get done. With tech-enabled swift onboarding, access to multiple products on a single platform and affordable investing, Groww has been able to appeal to the sensibilities of digitally savvy millennials,’’ says Harsh Jain – Co-founder, Groww.
The Unacademy moment in finance education
For a long time, the mantle of finance education in India remained in the hands of business news channels and pink papers that used language and content that was not relatable.Mainline newspapers and magazines carried personal finance columns where questions were invited from readers, and brief responses were given in the next week’s edition of the newspaper column. In a fast-paced financial environment today, one week is a lot of time. While the coronavirus pandemic has triggered massive growth for content consumption in general, it has specifically catalysed the consumption of finance education content produced by a long tail of independent content creators on platforms like Youtube. These creators are speaking to this new wave of first-time-investors in a simple, easy to understand language and fueling the process of simplifying investments. Many of these videos are created in a live stream format where viewers post their queries in the comment section, and the content creator or an expert responds to them in real-time. Jagdeep Singh, 28, who manages the Stock Business team at Groww, is an IIT Kharagpur alumnus and CFA level III candidate. Jagdeep possesses a strong understanding of stocks, mutual funds, and investment in general. Every week he makes 3-4 videos and educates 2.5 lac subscribers of Groww about developing the knowledge, skills, and mindset to become a smart investor. He does that in a very easy-to-understand, jargon-free language, which even a non-investor can relate to. Jagdeep is not alone; a long list of independent content creators are leading this wave of simplifying finance education for Indians. Many more are joining in as well, as there is a significant uptick in demand for such content.
The Robinhood effect
In the US, a millennial-focused investing app called Robinhood has single-handedly disrupted the US trading market. Launched six years ago, it is already the leader of stock investing in the US, and more than 50 percent of its users are first-time investors. After the COVID-19 pandemic, millennials have dominated global trading, and this trend in the US has also mirrored in India. As the Indian stocks markets continue to be volatile in the next few days, intra-day trading is expected to garner a lot of interest. With more time at their disposal, a large section of millennials is likely to make many more short-term bets. The next wave of growth in investing, however, will come from GenZ as the stocking revolution is already taking root in India’s universities and colleges.
Harshit Anand, 24, who has recently entered the job market and works for an MNC says, “As a member of the Finance club in my college, I learned a great deal about equities, mutual funds, forex, blockchain, and trading. During my college days, I used to recommend stocks to my brother and his friends. With my new-found financial independence, I am trading regularly with the Groww app and I hope to build a handsome portfolio by the age of 35. I choose Groww because it gives me everything I need in a very clean, easy to understand interface and doesn’t come loaded with the commitment of yearly charges and a weekly phone call.”
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