Students Should Know: Huge Fintech Innovations and Its Role In Stock Trading
India boasts the second largest education system in the world after China, with more than 700 universities and over 35,000 affiliated colleges that enroll over 20 million students. There is an emphasis on quality education for future propensity with so many students, with a majority of the students preferring technical subjects that offer better prospects. According to recent data, 16% of the students enroll for engineering and technology courses, and for a good reason since India’s IT industry is one of the fastest growing and one that is creating millions of jobs, something India needs to do if it's to keep up with its growing population.
Despite the ongoing coronavirus pandemic, 2020 has been massive for the Indian fintech industry as many high-profile companies have managed to attain the exclusive unicorn status. The growth has seen world eyes shift to the industry and what it has to offer. Many of the well-performing startups have been those that have made it possible for people to trade stocks and other financial instruments at a time when many individuals have lost their source of livelihood.
With the majority of the world locked up for a lengthy period and many operations curtailed by the pandemic, many people found themselves searching for ways to make something extra from the comfort of their homes. Searches for terms like what is online stock trading? Peaked on Google and other browsers according to available data by the end of Q2. Therefore, it’s not surprising to see most startups that attained unicorn status had some stock trading to offer.
Massive Capital Injection
According to a recent report by KPMG, Indian startups managed to raise around $1.7 billion in funding within the first six months of this year. An amount that is more than double what they managed last year despite the Covid-19 pandemic. In 2019 the sector managed to raise $726.6 million.
The huge capital injection is a testament to things to come for the growing fintech ecosystem in India. The biggest beneficiaries were platforms that offered solutions for the underserved sections of the population, like small and medium-sized businesses. And brokerage platforms, which made it easier to trade using portable devices without too much hassle.
One such platform is Paytm, which launched stockbroking services accessible from its wealth management platform in September. By doing so, the startup made it possible for retail investors to trade, buy and sell equities, and expects to onboard as many as 1 million investors by the end of the fiscal year. The majority are first-time users based in small cities and towns.
Back in October, the startup began to offer ETFs on its platform and at the time revealed it was aiming to onboard around 100,000 investors for the instruments in the next 12 – 18 months.
The company announced that ETF investments on the platform would start at 16 Rupees for equity, 44 Rupees for gold, and 120 Rupees for NIFTY. ETFs aren’t quite popular in India like they are in Europe and the USA. However, you can access 69 different kinds of ETFs covering various markets.
Paytm has been working hard for financial inclusion for all, especially those residing in underserved populations. And in July began its journey to becoming a financial powerhouse in India by purchasing Raheja QBE, a company that deals in insurance.
Trading Apps Saw An Uptick In Users
PhonePe, an app that allows for unified payments, recharges, and money transfers across different platforms, has also seen massive growth. In November, the app reached over 250 million registered users and now has its eyes set for December 2022, where according to current projections, it will double that figure.
After the Indian festive season, the startup recently revealed that it had managed to emerge as the largest digital gold purchase platform after capturing around 35% of the total market share. Its sales rose 6x times compared to last year.
Many governments had to enforce lockdowns as they struggled to handle the spread of the coronavirus. And this saw a peak in activity among online-based trading platforms like Groww, Zerodha, and Upstox as many first time investors flooded the apps to trade various financial instruments due to low rates and a dip in stock markets, which presented profit-making opportunities that were hard to resist.
According to Zerodha, the largest online discount broker in India, the number of Demat accounts registered on its platform in the first five months of this year far exceeded the number of clients they had onboarded in 2019.
This sector's growth has surprised even experts who seem to agree that even though the fintech sector has been growing steadily on its own over the years, the coronavirus pandemic has sped up the rate of adoption by several years. Also, it creates an initiative for the massive student base to keep improving their skills and innovating, thereby offering them a chance to launch their own startups or work for those that exist.