End-to-end dig­i­tal ex­pe­ri­ence drives rapid ex­pan­sion

Tier 3 mar­kets of­fer high growth op­por­tu­ni­ties:

Banking Frontiers - - Upstox - Me­hul@bank­ingfron­tiers.com

Up­stox is In­dia’s new-age on­line broking firm that pushes the lim­its of dig­i­tal fi­nan­cial in­vest­ing with in­no­va­tive tech­nol­ogy, in­tu­itive user ex­pe­ri­ence and un­beat­able pric­ing. The firm claims it is the first dis­count bro­ker to in­tro­duce com­mis­sion-free trad­ing in the coun­try. Founded as a pro­pri­etary trad­ing firm in 2008, it en­tered the re­tail bro­ker­age space in 2012 and to­day ranks among In­dia’s high-growth on­line bro­ker­age firms and is a lead­ing con­trib­u­tor to the coun­try’s top eq­uity and com­mod­ity ex­changes. Up­stox is now backed by Ratan Tata and ven­ture cap­i­tal firms like Kalaari Cap­i­tal and GVK Davix.

PLAT­FORMS FOR WEB, MO­BILE

Up­stox’s dig­i­tal strat­egy has al­ways been to use its tech­no­log­i­cal ex­per­tise to make in­vest­ing and trad­ing in the cap­i­tal mar­kets ac­ces­si­ble and easy for all. Look­ing at the way dig­i­tal economies are grow­ing, Up­stox re­al­ized that on­line was the way for­ward for the fin­tech space in In­dia. More­over, its low-cost bro­ker­age ad­van­tage model makes cap­i­tal mar­ket in­vest­ing af­ford­able for all. Up­stox is a unique bro­ker with no phys­i­cal branches.

Ravi Ku­mar, co-founder & CEO of the com­pany, says: “Our trad­ing suite was cre­ated keep­ing in mind the wide spec­trum of traders and in­vestors in In­dia. From the new trader to a vet­eran and ex­pe­ri­enced day trader, the Up­stox Pro plat­forms cater to them all. Both web and mo­bile based trad­ing plat­forms make it easy for traders to place or­ders in real time. Up­stox Pro mo­bile plat­form is avail­able on both an An­droid and iOS. It is one of the best rated apps on Play­store. Over the last fi­nan­cial year, we launched the Up­stox Mu­tual Funds Plat­form in or­der to cater to the grow­ing mar­ket of mu­tual fund in­vestors in In­dia. Up­stox has also been the first bro­ker to in­tro­duce sell­ing of shares with­out the need to sub­mit a phys­i­cal POA (Power of At­tor­ney) form.”

There has been no­table rise in the num­ber of traders and in­vestors us­ing Up­stox Pro mo­bile trad­ing app to place or­ders. Ravi Ku­mar says back in 2016, the num­ber of app down­loads was around 10,000. That num­ber has in­creased to about 136,000 as of mid-2018. Al­most 70% of daily or­ders are placed through Up­stox mo­bile app, he adds.

ON­LINE A/C OPEN­ING, OR­DERS

A big part of the Up­stox’s dig­i­tal strat­egy is easy on­board­ing of clients. The ac­count open­ing ex­pe­ri­ence is com­pletely on­line and pa­per­less. More­over, mod­i­fy­ing any de­tails re­lated to a trad­ing and/or de­mat ac­counts can be done on­line. That is why peo­ple in re­mote ar­eas can eas­ily down­load Up­stox Pro app to keep tab on mar­ket move­ments. Ex­plains Ravi Ku­mar: “An end-to-end on­line method of ac­count open­ing has paved the way for any­one with a smart­phone and even a 2G or more con­nec­tion to down­load the app, mon­i­tor the mar­kets and start trad­ing. To­day, tier 3 cities con­tribute more than one-third to our rev­enues. A big rea­son for the grow­ing in­ter­est from cus­tomers even in tier 2 cities is our Aad­haar-based ac­count open­ing sys­tem that al­lows open­ing a de­mat and trad­ing ac­count with­out hav­ing to sub­mit even a sin­gle piece of phys­i­cal pa­per. About 80% of the to­tal ac­counts opened are done us­ing our on­line por­tal and Aad­haar-based ac­count open­ing.”

About 98.5% of the to­tal or­ders on Up­stox dur­ing the FY 2017-18 were placed on­line and only 1.5% or­ders were placed us­ing its ‘call-and-trade’ fa­cil­ity. Its ‘zero bro­ker­age’ model, which is the most com­pet­i­tive, is gain­ing pop­u­lar­ity with in­vestors even in smaller towns and cities.

Tech­nol­ogy plays a big role be­hind Up­stox’s abil­ity to of­fer cost ben­e­fits to its cus­tomers. It charges `20 per in­tra­day or­der or 0.01% (which­ever is lower) for all seg­ments ir­re­spec­tive of the or­der size. Ravi Ku­mar says with a tra­di­tional bro­ker one might end up pay­ing `10,000 in bro­ker­age for an in­vest­ment of `100,000. How­ever, with Up­stox one would just be pay­ing Rs20 per in­tra­day or­der. More­over, one can trade with bet­ter lever­age in the de­riv­a­tives seg­ment as well, he adds.

CUS­TOMERS, REV­ENUES UP

The cost ben­e­fit that Up­stox of­fers has helped it in wit­ness­ing at least a 3-fold in­crease in client par­tic­i­pa­tion and turnover within a year. The num­ber of trades placed through the Up­stox plat­forms has also in­creased 3X. Its rev­enues have also in­creased 200% dur­ing the same pe­riod.

“Our pan-In­dia client base in­creased from 25,000 to 100,000 in the last one year. Our con­tri­bu­tion to daily no­tional turnover of ex­changes in­creased to a range of `140180 bil­lion per day from around `50-60 bil­lion per day last year. We are one of those few ven­ture cap­i­tal-funded start-ups in In­dia that turned prof­itable at an early stage. About 42% of rev­enue comes from tier 1 cities. How­ever, about 33% of to­tal

rev­enue is gen­er­ated from tier 3 cities. This goes to show that tier 3 cities are a grow­ing mar­ket,” says Ravi Ku­mar.

CRM BY AN­A­LYT­ICS

Data anal­y­sis has helped Up­stox study its cus­tomers’ pro­files, un­der­stand user be­hav­ior, learn their trad­ing habits and im­ple­ment changes in its prod­ucts ac­cord­ingly. Us­ing data from sur­veys and be­hav­ior pat­terns has helped its de­vel­op­ers to build soft­ware that di­rectly cater to the user.

Ravi Ku­mar claims that af­ter stream­lin­ing and pro­cess­ing data with the help of an­a­lyt­ics, the firm’s cus­tomer base grew by 2X be­tween FY 2017 and FY 2018. “Now, we have de­ployed an­a­lyt­ics at ev­ery step of the way – from lead gen­er­a­tion to cus­tomer re­ten­tion and sup­port. An­a­lyt­ics has helped us not only in­crease our busi­ness but also build bet­ter and user-friendly prod­ucts,” says he.

TECH FEA­TURES

With the e-DIS (Elec­tronic De­liv­ery In­struc­tion Slip), traders can sell their shares with­out even hav­ing to sub­mit a phys­i­cal POA (Power of At­tor­ney) form to Up­stox. Up­stox Pro trad­ing plat­form pro­vides for real-time chat sup­port em­bed­ded within the in­ter­face. A ro­bust help cen­tre is de­signed to pro­vide an­swers to ques­tions that a trader or an in­vestor might have. Adding and chang­ing de­tails as­so­ci­ated with a trad­ing ac­count such as a cus­tomer’s mo­bile num­ber, email ID, ad­dress etc. can be done on­line with­out hav­ing to sub­mit even a sin­gle piece of pa­per or doc­u­ment.

SKILLED FORCE, LOW OPEX

Up­stox’s dig­i­tal ini­tia­tives stem from a re­li­able team of soft­ware de­vel­op­ers, de­sign­ers and busi­ness de­vel­op­ment ex­ec­u­tives. “We in­vest in our peo­ple. Up­stox’s be­liefs in hir­ing highly skilled and driven in­di­vid­u­als to cre­ate a scal­able and seam­less trad­ing ex­pe­ri­ence, has been suc­cess­ful. The over­all num­ber of em­ploy­ees work­ing with the com­pany stands at 110 as of now with num­ber of soft­ware and net­work en­gi­neers in the com­pany be­ing 40. The re­al­ity is that thanks to our tech, we are able to reach cus­tomers with­out hav­ing to rely on the brick-and-mor­tar setup,” he says.

PART­NERS, FIN­TECH EX­PERTS

The busi­ness of Up­stox is es­sen­tially based on a part­ner model. Its part­ners act as its am­bas­sadors who cre­ate aware­ness about low cost trad­ing and in­vest­ing among the mem­bers of their com­mu­nity. The tech­nol­ogy is ro­bust enough to give the part­ners a plat­form wherein they can track their per­for­mance and make sure that their cus­tomers get the sup­port they need.

Says Ravi Ku­mar: “Up­stox is on its way to build a ro­bust net­work of part­ners across the coun­try. Prior to June 2017, Up­stox had about 150 part­ners. Within the last one year, there are more than 400 part­ners spread across 125 cities in In­dia. In ad­di­tion, our team of fin­tech ex­perts con­ducts weekly we­bi­nars cov­er­ing a va­ri­ety of top­ics in trad­ing and in­vest­ing for our cus­tomers, who can just reg­is­ter for free and learn from in­dus­try ex­perts di­rectly. As for our own em­ploy­ees, more than half our staff mem­bers are de­vel­op­ers. De­sign­ers, back of­fice ex­ec­u­tives, risk man­age­ment team, mu­tual funds’ team, com­mu­ni­ca­tion depart­ment – work to­gether to com­bine our fi­nan­cial prow­ess and so­phis­ti­cated tech and be­come a pioneer­ing force in the fin­tech space.”

One can ac­cess through Up­stox tech, smart desk­top trad­ing apps such as Fox Trader and Dart­stock, back­test one’s trad­ing strate­gies, use real time trend scan­ners to an­a­lyze mar­kets and study the mar­ket closely with pow­er­ful tools. Ravi gives an ex­am­ple: “One can an­a­lyze mar­kets and build unique trad­ing strate­gies by us­ing our AmiBro­ker - the most fa­mous chart­ing soft­ware in the in­dus­try. One can trade seam­lessly through Up­stox as soon as your trad­ing sig­nals are trig­gered.”

Up­stox has been able to bring in part­ners on-board be­cause of its easy ac­count open­ing process and in­tu­itive trad­ing soft­ware. Even when an ac­count is opened, Up­stox con­tin­ues to pro­vide hi-tech ser­vices to its cus­tomers - be it through chart­ing tools, easy in­ter­face, ef­fi­cient re­ports from the back of­fice or by in­tro­duc­ing spe­cial dash­boards for cus­tomers and part­ners.

Ravi Ku­mar re­veals: “We work ex­ten­sively with Ama­zon Web Ser­vices (AWS). A lot of our client fac­ing tech­nol­ogy is hosted on the cloud and AWS is great at scal­ing ser­vices. This is crit­i­cal when you are in an in­dus­try that ex­pe­ri­ences sud­den spikes and drops. Dur­ing times when the mar­kets move quick and a lot of traders want to get in, our tech and in­ter­net have to be ready to han­dle that load. That’s where AWS comes in and scales au­to­mat­i­cally to han­dle high load.”

BOOST Eq­UITY PAR­TIC­I­PA­TION

A ma­jor tar­get for Up­stox for the on­go­ing year is to build a strong net­work of traders and in­vestors across the coun­try. A team of re­la­tion­ship man­agers, a few de­vel­op­ers and ex­ec­u­tives will solely work on build­ing a ro­bust net­work for part­ners to en­able them to un­leash their en­tre­pre­neur­ial spirit. Ravi con­cludes: “Our goal is to cre­ate re­li­able and fast trad­ing prod­ucts that helps boost eq­uity mar­ket par­tic­i­pa­tion in the coun­try. Our busi­ness plan in­cludes build­ing in­tu­itive so­lu­tions that will equip part­ners to help cus­tomers in a bet­ter way. It is also a part of Up­stox’s larger goal to make trad­ing and in­vest­ing in the stock mar­kets af­ford­able and ac­ces­si­ble for all. More­over, we also want to em­power longterm in­vestors with a strong tech stack and in­tu­itive UI so that they can con­cen­trate on build­ing their port­fo­lio.”

Ravi Ku­mar feels an­a­lyt­ics have helped to in­crease the busi­ness and also build user­friendly prod­ucts

Up­stox screen

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