To save cost, brokerages are now promoting online trading. Clients with technology at their behest are lapping up the opportunity.
Data sourced from the NSE and the BSE also tell the same story.
Over the last year, on the NSE, internet trading has risen by about 18 per cent. Daily average online trading volume rose from Rs 19,109 crore to Rs 22,553 crore.
Between March and May, Internet trading on the BSE has increased 0.6 percentage points.
However, volumes through this mode have been more sluggish recently. For instance, from November 2011 and June 2012, internet trading on the exchange’s platform has increased by about one per cent.
Mr Abhinav Angirish, Founder of Investonline, a trading Web site, said, “Promoting online transactions saves cost. A client can transact on their own and does not have to go through dealers. All we need is a single point contact so that all trades can be routed from there.”
A client who does not have an internet trading account has to contact a dealer of a brokerage either in person or over the phone to buy and sell stocks. This means establishment costs for a broker in terms of hiring a dealer and establishing a local office. In smaller locations broker presence is through a sub-broker or franchisee.
Internet has enabled clients to transact online through the brokerage’s Web site and execute the trade themselves. This significantly reduces the number of contact points required otherwise, thus reducing cost and load (of servicing clients) on branches.
Brokers are also encouraging this as an economical substitute to face-to-face client advisory.
“I would definitely recommend it to the younger generation who are increasingly transacting on their own as it makes life comfortable for them,” said Mr Satish Menon, Executive Director of Geojit BNP Paribas Financial Services.
“On an average 40 per cent of the trades done during the day by our clients are internet-based. Those who prefer this route are the local tech-savvy youth,” he added.