Investing space: Innovations have democratised the world of investment

Investing is no longer a domain reserved for the older generation or wealthy seasoned investors, nor is it dominated by old-school family financial advisors. The internet and technology have democratised the world of investing, making way for people across the board to embark on their investing journey. This is especially true for the younger generation and novice investors who have been able to use these developments to their advantage, moreover such apps make investing less expensive, easier to understand, quicker and more enticing to actually commit to it consistently.

Below are some of the top innovations that have helped to reinvent the investing ecosystem and make it more appealing to first-time investors:

1. SIP: Since the late 90s, Systematic Investment Plan or SIPs have continued to empower common people to invest small amounts of money, sometimes as small as even Rs 500, in a disciplined manner across a variety of funds that suit their financial needs and goals. This can be done without the worrying of buying and selling at the right time and concerns about market volatility much. SIPs offered by mutual funds are one of the easiest and best ways for novice investors to start their investing journey. And although SIP has been around in India since the late 90s, the process of starting one has always been cumbersome, however, this has now changed because of the tech-based developments that are listed below.
2. Digitisation of KYC: One of the main reasons that investing via SIPs or investing at all has become more hassle-free is the digitisation of paperwork and KYC. You can now upload required documents online, get them verified online and the details can be shared across all investment platforms that one chooses to use rather than having to initiate the process all over again every time you want to start a new SIP. This has made investing a seamless process for those who are new to it and is appealing to young people who prefer quick and easy online processes over cumbersome and heavily paper-based steps.
3. Going brokerless – There was a time when the traditional middleman or a broker was indispensable to the investing process. However, several apps have worked hard and continue to do so in order to lessen the dependence on brokers, making it easier, cheaper and quicker for first time investors to directly invest and trade in the stock market.
4. Pre-defined/automated investment options – There are scores of new investment platforms today that are adding to the investment narrative by offering newer investment options such as pre-made baskets of thematic funds. Such offerings enable investors to align their investments with their lifestyle goals and inclinations and build a diversified portfolio with investments across various sectors.
5. Spare change investing – This is one of the most exciting innovations driven by new-age technology; apps that enable the automatic and instant investment of a small amount of money (as small an amount as ₹1), every time you make an online transaction, making investing as easy as spending. Spare change investing is an innovation that is more befitting for younger investors who transact digitally almost every day and have a high intent to start investing yet don’t start due to lack of enough money or the lack of ease in investing.  This is especially true for millennials who have just started earning, because spare change investing leads to small amounts of money being invested multiple times in a month as opposed to a significantly large chunk being deducted once a month which may be difficult for those who are working on entry-level salaries.
6. Higher financial literacy: Even though this is not an innovation per se, it is worth a mention because the seamless access to information has led to significant rise of financial literacy, especially among the youth. Whether it is social media mentors or more talk about investing and money matters entering public discourse, there is a higher intent to grow one’s money due to increased access to investment information, making it an overall positive and conducive environment for investing.

Technology has made sure that there is an innovation platform for every type of investor today. Every innovation in the investing space has played a role in eradicating a type of barrier and brought investing closer to common people who might not be financial experts but definitely have the intent to grow their wealth, no matter how small it might be.  Thus, never before has it been simpler to start investing.

The author is the Founder & CEO of Deciml. Views expressed are personal. 

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