By Bhuvaneshwari A.
Here’s a question that the Indian financial services industry needs to address: ‘We have made investing easy but have we made it meaningful?’ A crucial question which is often avoided, not because the answer is not known, but owing to the discomfort it poses. We have built one of the most accessible investing ecosystems in the world with ‘Zero brokerage,’ ‘three-minute KYC,’ ‘one-click trades from a phone in a tier three town’ and ‘Over 100 million Demat accounts.’ And, we celebrated every milestone. However, what we didn’t address is that most of the retail traders in our derivatives market lost money last year. Why? Simply because it didn’t align with the narrative.
How Easy Becomes Dangerous Sometimes
Picture this: A 24-year-old in Nagpur watches an investment influencer on YouTube flash overnight profits on their phone, and they open an account the same evening. It is to be noted that they have never read a balance sheet, nor do they understand what implied volatility means. But because the app is attractive, the onboarding is frictionless, and the rush of a quick gain feels indistinguishable from a video game, they go for it. Six months later, they lose their savings. Their family labels this as part of the share market game, and avoids it for a generation. This is not financial inclusion, but financial exclusion wearing a fintech uniform. The challenge is not that we gave people access, it is that we gave them access to complexity without offering the appropriate tools to navigate it. It is like we handed a Formula One car to someone who just got their learner’s licence and called it democratisation.
The Uncomfortable Truth
Out of all the active traders in India’s derivatives segment, very few show long-term investing behaviour. They are not investors who occasionally trade, but speculators who downloaded a brokerage app. And, we built the infrastructure that makes it seamless for them to speculate, without asking whether they should or not. The industry measures success in accounts opened, apps downloaded, and daily active users. We have built brilliant acquisition funnels, but forgot to build the financial confidence that should have come after that.
Convenience Is Not Empowerment
There is a fundamental distinction that the industry tends to blur - sometimes deliberately. Access and understanding are not the same thing. A customer who can execute a trade in thirty seconds but cannot explain why their portfolio fell when the market rose is not an empowered investor. They are digitally active. And there is a profound difference. The most honest analogy: we build superb roads, encourage everyone to drive, and quietly remove the driving test. And then the accidents surprise us.
Real empowerment looks different. It may look something like this: a shopkeeper in Surat started a Rs 3,000 SIP during the pandemic because someone took twenty minutes to explain compounding with a simple example. It may also look like a retired schoolteacher in Lucknow who rebalanced their portfolio when interest rates changed, because they actually understood what interest rate risk means. They don’t trade weekly options, but check their portfolio quarterly. In fifteen years, they would create something real. This is the investor we should be designing for. Not the most profitable customer this quarter, but the most valuable one over a lifetime.
The Way Forward
The industry needs to do three things it has been reluctant to do until now. Firstly, introduce friction where it matters. An F&O screen and a SIP screen should not be equally inviting. Long-term wealth creation should feel celebrated. High-risk speculation should require acknowledgement, confirmation, and a genuine pause. Friction is not a UX failure - it is a responsibility.
Secondly, redefine what success means internally. Track customer outcomes, not just customer acquisition. Did the net worth of our customers grow? Are they less financially anxious than how they were two years ago? Are they investing with a goal in place - a house, their children’s education, retirement - or just reacting to the market noise? These are difficult metrics to put on a dashboard but they are the only ones that should matter.
Thirdly, and most importantly - tell the truth. Tell a customer when a product is not right for them. Tell them when the risk they are taking is disproportionate to what they can afford to lose. That kind of honesty is not a cost to the business. It is the foundation of the only thing that outlasts every market cycle: trust.
(Bhuvaneshwari A. is MD & CEO, SBICAP Securities Limited)
