According to a report by Benori Knowledge, a new-age provider of custom research and analytic solutions investors are flocking to digital platforms, because they find them convenient to use and they offer them a wider range of options. Many members of the younger generations are actually beginning their wealth management journey through digital platforms, with 93 per cent of users falling into the millennial segment and over 81 per cent starting their investment journey in the last three years. The younger crowd that these platforms attract are also increasingly diverse. It is apparent that they are boosting female presence in the investment community, with women making up almost 40 per cent of digital investment platform users. However in terms of geographic dispersion, the investment space remains clustered amongst highly urbanised areas, with over 60 per cent of users coming from Tier 1 cities. Backed by India’s fintech boom, the digital investment market is also set to be worth $14.3 billion by 2025, growing from $6.4 billion in 2021 at a 5-year CAGR of 22.4 per cent.
The report further revealed that the rise in digital wealth management platforms can be attributed to users getting a higher return on their investments. 72 per cent state that accruing higher gains is their primary objective for investing digitally. On top of that, 42 per cent invest to attain their financial goals that include building savings for retirement (51 per cent) and reducing taxable income (25 per cent). While Mutual funds emerged as the most popular option for online investors, accounting for 62 per cent of their trading activities, interest in stock trading is beginning to catch up, with half of users (51 per cent ) participating in public markets.
Investors are also pleased with their ease-of-use and operation (68 per cent) and their quick and convenient KYC process (59 per cent), which overcomes bureaucratic delays. When considering the benefits of investing online as opposed to the traditional way, users highlighted convenience (72per cent), access to a larger range of products (55 per cent) and lower brokerage fees (47 per cent).
Despite the rise of digital investment solutions, investor awareness is mostly guided offline, with 36 per cent of users consulting friends and family and 17 per cent turning to a financial advisor. Other sources that people rely on for investment related information include digital avenues like financial websites and social media (32 per cent), while only 14 per cent rely on traditional media (newspapers, TV and radio).
However, digital investment platforms do come with some limitations as well. It is not yet clear how they operate in terms of data security. 60 per cent pointed out privacy issues, 58 per cent found lack of relevant information and unreliability as causes for concern.
This survey was conducted with 1,000+ digital investors, to gain a better understanding of usage patterns, preferences and trading activities on online investment platforms.