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Evolution of trading platforms and future ahead

by Prabhakar Tiwari (Chief Growth Officer, Angel One Ltd)
May 05, 2022
Evolution of trading platforms and future ahead, Market, KonexioNetwork.com

With the advent of the internet and technology-enabled solutions, the capital markets have undergone a paradigm shift. Over the past few years, trading platforms have improved the accessibility to the financial markets, with about 29 lakh new Demat accounts on average being opened every month in FY22. The digitization of stock markets started with the introduction of the Screen-based Trading System (SBTS) more than a decade back. It has evolved since then with new-age technologies like Artificial Intelligence (AI) and Machine Learning (ML).

Prior to trading platforms, stock markets were accessible to just a few. However, the rapid digitization and smartphone penetration are gradually making trading and investments accessible even in tier 2, tier 3, and beyond cities.

Digitization of trading platforms

Digitization has been at the forefront of the gradual evolution of trading platforms. With the launch of app-based trading platforms in 2010, broking houses started going digital to provide services to a larger set of investors. Essentially, they were introduced as an online platform to monitor market prices, and accordingly assist investors to buy, sell and hold stock options. Since its introduction, trading platforms have become a one-stop destination for multiple investment options, including bonds, currencies, stock, commodities, and other financial assets.

From opening a Demat account and making trades to maintaining an investment portfolio, web and mobile-based applications have made trading convenient for today’s tech-savvy individuals. It has led to increased participation by millennials and GenZ.

Tech-enabled solutions fostering participation

The gradual adoption of new-age technologies has significantly improved user experience and hence, retail participation in the stock market. Digital trading platforms equipped with AI enable retail investors to research, explore, understand and make informed investment decisions. More trading platforms are deploying AI to assist users in executing trades at an optimal price. Technological advancements and API integration of trading platforms are some of the factors that continuously influence the retail participation of new-age investors. The global online trading platform market size swelled significantly, over $8 billion in 2021.

Moreover, trading platforms today provide advanced trading features that enable a seamless wealth creation journey.

The road ahead

The increasing participation in the financial markets is further fueling the growth of digital platforms that are rolling out new products and services to make investments accessible to the otherwise underserved markets. Nowadays, more new-age investors seek platforms that offer a one-stop platform for all financial services. This paves the way for super apps that proffer users with multiple services ranging from trading in the stock market, FDs, and mutual funds to seeking loans.

As we move ahead, one of the emerging trends in the digital trading platforms is the integration of AI-powered chatbots that facilitates new as well as seasoned investors with financial market updates. With the continuous evolution of digital trading platforms, the online trading platform market is expected to reach over$12 billion in 2028, at a 5.1% CAGR from 2021 to 2028as per certain market estimates.