Using technology to unearth India’s investment potential


The fact that Indian stock markets have matured since the economic and financial liberalization in the early 1990s is very evident. The Sensex—which stayed well short of the 5,000 mark for most of the 1990s—crossed the 37K mark, a few days ago. Establishing a secure ecosystem, our nation’s stock markets have become one of the significant avenues for investment by the common man. It has also succeeded in pulling a sizeable retail participation. However, an enormous potential investor still lies untapped in the small and remote regions of the country.


India is a nation of over 1.3 billion people, of which a vast majority (almost 70%) are living in the rural and small towns. There are about 8 tier-1 cities, 26 tier-2 cities, 33 tier-3 cities and over 5,000 tier-4 towns, while there are more than 6,38,000 villages in the country. It is also a well known fact that more than 50% of India’s population is  millennials, most of whom reside in villages and small cities. It is this group, primarily, which has a significant pie of income at their disposal. With top five metros contributing more than 80% to the total capital market investments, it must be realized that urban markets have been farmed and are reaching their optimal capacity.


The fact then that smaller regions of India offer the most potential and opportunity for capital market business is a no-brainer. Improvement in technologies such as mobile communication, internet and online trading facilities are the surest ways to broaden and fast track the geographical reach of the capital markets. With increasing access to the internet and power to purchase smartphones, smaller cities and villages have emerged as a large playground for businesses.  The adoption of latest mobile technologies may be happening in the urban centers of the country, but increasingly, tier-2, tier-3 and rural areas are where volumes are growing and expected to further bloom, going forward.

Data shows that younger generation from tier-3 cities—which is tech-savvy and with some disposable income or even fresh into their jobs—prefer the mobile-phone route to trade. More than 70% of the trade volumes generated are from mobile trading platforms.

How can technology accelerate the process of tapping into the smaller towns and villages?

It is easily accessible and can reach places where physical footprints are difficult. It also provides customized solutions. Mobile trading applications and online trading platforms can be localised and tailored to meet specific features, including language requirements of a tier-2, tier-3 or even a rural market. 

Additionally, online trading platforms are more appealing to demography in small towns and villages as it allows the possibility of small-ticket investments. Equal opportunities and experiences are provided to all concerned to access the information, irrespective of the geographical location. Use of mobile apps and online platforms helps investors from small regions feel in control of their investment decisions and reduce reliability on market middlemen.

Technology also provides speed, transparency in information, and security on investments. Today, a trading member can comfortably sit at his home with a laptop, iPad, or mobile phone and execute an order with ease. Technology has allowed for shorter trade cycles. So, investors today do not have to wait long periods to see proceeds from their securities.

Moreover, distribution of a financial instrument for investment is more scalable with the help of technology and can offer a variety of investment avenues on the click of a button. It has also been observed that investors are displaying more trust on trading information generated by AI.

Technology can lower costs by helping financial institutions and businesses enhance value, improve margins, and increase efficiency manifold and therefore, in turn, also lower the cost of investments for customers.Overall, offering technology in even the smallest town could bring in fold a substantial number of retail investors, who can play a vital role in strengthening the capital markets and in turn the economic growth.