India’s Share of Mobile Trading Touches New Record of 23% on NSE

One of the big changes in the trading pattern in the last few years has been the rise of mobile trading. In fact, the numbers are quite stunning. This growth has been amazing in terms of trading on the NSE and on the BSE.

For example, if you look at the BSE, the share of mobile trading was 6.94% in December 2019. This increased to 16.66% in December 2020 and further to 19.06% on the BSE in December 2021. In short, mobile trading now accounts for one-fifth of trading on the BSE. On the NSE, the share of mobile trading is still higher at 23%.
 

What has triggered this surge in mobile trading?
 

1) The sharp fall in the cost of smart phones and their easy availability through various schemes made it possible to substantially expand mobile trading. This was aided by a sharp fall in bandwidth costs.

2) Mobile trading got a boost from better bandwidth connectivity in the last few years. It is not just that the improved bandwidth quality that is helping put through trades easily, but even brokerage houses have optimized their mobile apps in such a way as to get maximum mileage.

3) The account opening has been simplified substantially. With the advent of online account opening and Aadhar based authentication the process of account opening has become a lot simpler for most traders. This has become a boost to many first time traders to directly onboard as mobile based traders.

4) The rise of low cost brokerages and zero cost brokerages in the market have also helped as they substantially reduced the risk and cost of entry and exit in the equity markets. In fact, low costs have been one of the big drivers of the surge mobile trading in the Indian context in the last few years.

5) Mobile trading now looks a lot safer to investors after the new rules on power of attorney. These entail that the investor or trader can directly give instructions to NSDL or CDSL for debits rather than giving power of attorney to brokers. Many investors saw this is as an important safety hygiene measure.

6) Lastly, the rise of the millennial investors with exposure to digital gadgets and a better understanding of market and risk has also boosted mobile trading.

One of the biggest benefits of mobile trading has been that geography is no longer a constraint. Also, scaling up the business was a big challenge in the old offline model but in the mobile model, it is more about unlimited scaling of volumes with minimal incremental cost. In short, this model works to perfection for the brokers and for the investors.