How to ensure 100% equity market access to small-town retail traders?

Digital transformation of the Indian stock market

Before the advent of digitization, the stock market was a chaotic crowd full of brokers and traders. Without extensive paperwork and help from stock brokers, opening a Demat account or investing in shares was impossible. Digitization has increased the efficiency of the Indian stock market through dematerialization and online trading. 

Many application-based trading platforms have created the right avenue for investors to open Demat accounts within minutes and do trading on the go using their smartphones. Today, stock traders can monitor their portfolios, analyze price changes and calculate future price trends through their smartphones. 

As a result of the digital transformation, the stock market has increased transparency, volume and liquidity, reduced transaction costs, and better investor participation. Institutional stock traders have devised advanced algorithms for high-frequency trading with the help of the latest technologies 

Increase in retail stock traders from non-English speaking states

In the early phases of digital transformation, institutional traders had a major stake in the stock market. There has been a colossal change in this pattern over the past few years. Today retail stock traders are showing increased participation in share trading. Even though these investors were only making smaller investments in the stocks, in the beginning, the COVID-19 lockdown period encouraged them to utilize stock trading to enhance their financial security. As of 2021, 45% of the cash turnover of NSE came from retail investors.

By the end of 2021, the total number of retail investors had increased by 14.2 million, with 12.25 new accounts opened on CDSL and 1.9million accounts on NDSL. This surge of retail investors is not just from the top metros in the country, but also from the Tier2 and Tier 3 cities like Nashik, Jaipur, Guntur, Patna, Kannur, Visakhapattanam and Nainital.  

According to SEBI 1.3 crore of investor accounts, came from people with annual incomes up to 5 lakh. After 2020, the   Indian Stock market witnessed a surge of retail investors from many non-English speaking states such as Assam, Arunachal Pradesh, Telangana, Odisha etc. During the year ending July 2021, these states attracted 90- 181% more investors than they did in the year before

Challenges of non-English speaking stock traders

Stock trading is a time-sensitive business, and making investment decisions without complete knowledge and market information is even riskier.  Many retail investors from small towns end up making bad investments because they are unable to understand important disclosures on time. In some cases, they rely on hearsay from ‘so-called stock advisers’ and end up losing money. In early 2021, when the DHFL stocks plummeted many retail investors incurred major losses in comparison to the institutional investors who exited on time. 

 In India, SEBI had issued several directives such as 

  • Intermediaries to communicate with the brokers in the local language
  • Documents related to the rights and obligations of the brokers, disclosures on risks, do’s and don’ts of stock trading to be translated into the local languages 
  • Issuers have to publish the announcement of filing the draft offer document with SEBI in English, Hindi and one other vernacular language newspaper with wider circulation to support local language-speaking retail traders. 

However, these initiatives are still nascent, and even today, only basic information is available in local languages.  

New perspectives on regional languages in the Indian stock market

While there are still no official regulations to support the multilingual population in the  Indian share market, many social media influencers and brokerage firms have stepped up to bridge this language barrier. The social media influencers like  CA Rachana Ranade are now focusing on spreading financial literacy in regional languages. Currently, the content on her youtube channel is available in Marathi and English. The availability of localized market research content is important to many small-town investors to make informed investment decisions.

To protect retail investors from scams, the right interpretation of time-sensitive information related to the share market is important. Many brokerage firms have partnered with social media influencers to explain IPO and stock-related information in languages like Hindi, Marathi, and Gujarati. However, considering the recent increase in retail traders from states like Assam, Arunachal Pradesh, Odisha, etc.. these initiative needs to be expanded across other regional languages as well. 

Bridge the language barrier with Mox Veda from  Process Nine 

Mox Veda has the capability of providing a complete localization experience to any of your digital properties and helping you have 360-degree control of the content without compromising your data security. This AI-powered localization tool has multilingual SEO capabilities that can give your digital platform the best visibility on any search engine. 

5paisa, a leading discount stock broker localized their Android application using Mox Veda in eight languages. After witnessing an aggressive client accretion in FY22 along with 84% of incremental clients from tier2 and tier 3 cities, 5paisa decided that personalization would be the key to effectively reaching out to the small-town investors. Within a month of the soft launch of the localized application, it was observed that 20% of the users have already chosen the non-English version of the app. 

We also have the capability to deliver seamless video localization (speech-to-speech) while maintaining contextual and lingual subtlety. Our technology will help in overlaying the original voice with an automated voice in the language of your targeted demographic along with subtitles in multiple languages.

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