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Combination of advice and ease of use creates differentiation

LiveMint logoLiveMint 04-04-2017 Lisa Pallavi Barbora

Kotak Securities was one of the first to introduce broking transactions on mobile phones. It was a slow start, nearly 6 years ago. Today, as smartphones become the new reality and network speeds improve, the mobile segment contributes around 10% to the overall brokerage revenue. Kamlesh Rao, chief executive officer, Kotak Securities, speaks about the need to continuously update digital platforms to suit clients’ needs. At the same time, it is too early, he says, to write off personal interactions with dealers for all clients.

Kotak Securities was one of the first to start with the mobile trading platform. Can you share some numbers on growth and penetration of mobile use?

The mobile volume of the exchange is growing roughly at 50-60%. In the past one to one-and-a-half years, many other firms have introduced mobile apps for trading. On the cash side, Kotak Securities has a market share of about 20-22% of the mobile volumes on the exchange. There are a number of reasons for the popularity. For example, at work there may be restrictions on which websites you can access, but there are no such restrictions on phones. A mobile platform is better utilized for cash transactions than for derivatives. We are working on a separate app for derivative trades as the nature of transactions and information required are different.

Today, 82% of our incremental accounts are opened online. Even for our existing offline customers, we have developed an app they can download and use to track orders, contract notes and their demat holding. Online customers have the option of using the offline mode and calling in for trades as well.

How does one ensure that the information available in the app is used productively and doesn’t invite excessive trading?

We make sure that bulk of the information is available in the open section of the app, which does not require the customer to login. There is an overdose of information in general. We aggregate news from all sources and it is a widget-based screen where you can decide the information you want to see. Whenever you login, you get to see only the relevant information. Company-specific news also gets bifurcated into positive and negative news.

I’m not sure if this prompts people to trade more. When it comes to money, you are sure whether you want to trade or not and only then you access the information. By virtue of access we haven’t seen any unusual trading.

How do you differentiate your product?

The differentiation does not come from any of the technology platforms, rather it is about Kotak as a brand. Two things make a difference. First, trusting the brand: your demat account is also susceptible to fraud, and from that perspective brand is important. Second, people look at the combination of technology platforms rather than just one piece. Last, it’s the quality of advice. We also invite new customers to share their existing portfolios for a review, and we send a brief advisory on the holdings. We have tied up with a firm called Market Mojo; it helps in advising on around 4,000 stocks on the go. The mobile platform itself is a hygiene element; it can’t be inferior to others. We try to ensure new facilities, but it’s a combination of advice and ease of use that differentiate.

Can mobile platforms displace dealer-client equations?

It will eat into the offline space incrementally but I am not sure about replacement. It is similar to comparing video conferencing—does it mean one does not travel at all? But productivity improves as a result of video conferencing. We constantly update our app. The focus remains on keeping it simple. Incremental features like chatbots have been launched but as of now it has not replaced voice calls. We are also working on robo-dealers, but there will always be a set of people who look for dealer interaction. So, this too may not completely replace the existing setup.

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