In conversation with Charulatha, Correspondent, Siliconindia Magazine. Gagan shares his views on the role of fintech in the digital broking industry and how it has transformed traditional brokerage services. He also discussed the roles does artificial intelligence and machine learning play in digital broking.

Gagan Singla has worked in various roles across multiple organizations, including HDFC Group, PwC UK, Deloitte US, IIFL, Angel One/Broking, Simplilearn US, Quikr, and Hughes. Gagan is known in the industry as an Internet business builder, with customer obsession at the center. With his unique blend of technical expertise and customer- centricity, Gagan has been able to build and delivery exceptional products and services in the fintech industry.

Can you please explain the role of fintech in the digital broking industry and how it has transformed traditional brokerage services? What are some key advantages of digital broking platforms over traditional brokerage firms?
The confluence of fintech and digital broking has led to the emergence of Wealthtech solutions in India. Wealthtech is expected to touch $63 billion by 2025 with over 12 million investors; mostly from tier-2 and tier-3 cities. Wealthtech actually digitizes the entire digital journey of the investor from investor need identification to structuring portfolio solutions to monitoring based on a multiple regression of variables. The use of AI and ML in broking is still in its nascent stage, but the potential is immense.

AI enabled advisory insights is a big leap where a very substantial portion of advice can be presented in an automated yet customized manner.

In the last 5 years, the market share of digital discount brokers has gone up from 11% to 57% (Source: CLSA). The digital broking platforms bring several advantages over traditional broking platforms. Firstly, they look at technology as the driving force for financial solutions, rather than just an enabler. Digital broking offers speed and scalability that is not possible in traditional broking. Also, digital broking empowers the use of artificial intelligence, that has the potential to transform the broking and financial advisory landscape in India.

Can you please discuss some of the latest technological advancements in the digital broking industry and their impact in the market?
The digital broking offerings in India started off as plain vanilla online trading and app-based modules. In the last few years, many discrete pegs have been added to it. The next step to high-speed broking services was the digital Wealthtech platforms that enabled a 360 degree view of the customer portfolio. There are several technological advances that are being built into these digital broking offerings.

AI enabled advisory insights is a big leap where a very substantial portion of advice can be presented in an automated yet customized manner. Secondly, the digital platform has enabled cross selling and outsourcing of services in a more seamless manner. Also, digitization allows better structuring and monitoring of thematic investing and alternative strategies. Then there are some areas that are work in progress. Applications that use Generative AI are just about being built in and they can transform the landscape.

"Today's trading landscape demands traders to be equipped with the best technology and customer management services."

It is a matter of time that the synergy of technology and AI shall unveil a remarkable transformation. Like a skilled Relationship Manager (RM), they will unravel the intricacies of human emotions, not only comprehending but also empathetically responding to the needs of customers. The advancement of technology and AI shall bridge the gap between artificial intelligence and heartfelt empathy, transforming the way we connect, understand, and serve one another.

How do fintech solutions improve the accessibility and user experience for retail investors in the digital broking industry? What are some regulatory considerations and challenges that fintech companies in the digital broking industry need to navigate?
Between 2021 and 2025, Fintech is expected to grow from being a $50 billion industry to a $150 billion industry. Fintech allows much greater access to research and information and integrates with the broking platform. It also makes seamless integration of research and execution possible through skilful use of call to action (CTA). Above all, digital broking is geographically agnostic and that allows much greater access and greater reach.

Today's trading landscape demands traders to be equipped with the best technology and customer management services. While technology certainly offers a huge service experience, people take comfort in people. Hence, in addition to robust technology, a dedicated customer experience team that offers a human interface to the customers, is also required. At a regulatory level, the challenge is to strike a balance between too much regulation and too much leeway; which is not compatible with capital market integrity.

How do digital broking platforms ensure the security and privacy of user data and transactions? Can you please discuss the importance of seamless integration with other financial services and platforms in the digital broking industry, such as payment systems and banking services?
Indian outlay on cybersecurity is growing at 10.5% annually as per Gartner; much faster than most of Asia. Data privacy is achieved through complex access algorithms like dual identity, triple authentication, etc. It does call for greater investment in cybersecurity, quality hardware and training. Today, online broking already integrates a variety of different ecosystems like the broking ecosystem, demat ecosystem, banking, payment interfaces like UPI, NEFT, IMPS, etc.

What roles does artificial intelligence and machine learning play in digital broking. And how do you see the integration of blockchain technology impacting the fintech and digital broking industry, particularly in terms of improving transparency and efficiency.
AI and ML are about making computers go beyond the realm of execution into reasoning and ideation. By 2025, Indian AI market is expected to touch $7.8 billion as per the National AI Portal of India. That is still in its nascent stages but platforms like ChatGPT have shown the immense potential that AI has. For now, the Indian government is averse to cryptos but open to the underlying blockchain technology. Globally, it is expected that blockchain will enter into the realm of digital broking in the form of smart contracts, perpetual back office data, data integrity, etc.