We Are Aggressive On The Digital Marketing To Deepen Investing Culture In Tier 2-3 & Beyond Cities: Narayan Gangadhar, CEO, Angel Broking Ltd

The highs and lows of the market and its potential for coming months -What is the strategy to further scale the business? Brief us about your platform, what is the vision of Angel One?

Digitization has facilitated an expansion in the overall market. It has driven growth from Tier 2 and Tier 3 cities. Digital brokers, like ourselves, with an open architecture and variety of digital assets, built a wide reach which is facilitating gain in market share. We will see more clients coming from Tier 2, 3 and beyond cities participating in the stock market in the coming years. Considering that there is a lot of untapped potential in these markets, we plan to provide GenZ and millennials from these Tier 2 and Tier 3 cities with simplified financial solutions, be it an investment, trading, mutual funds, loans or insurance. We are also continuously upgrading our products and services to offer a differentiated and improved experience to all our clients. This, coupled with our focused digital marketing strategies, will equip us to broad base the market further.

As a first step, we have in place a robust mobile app and a web platform for all our clients. Our products are powered by advanced technologies backed by data science. We strongly believe that by offering the best customer experience across all products and services, will eventually result in Angel achieving its long term goal, of becoming a partner of the young Gen Z and millennials during their journey to build a robust financial future for themselves.

Factors that led to growth so far in 2021, how much growth have you witnessed and What are your strategies/targeted revenue for the coming year?

We have registered very strong growth across business parameters in 2021. We acquired 4.3 million clients in CY 2021 as against 1.6 million in CY 2020. This led to a 130% YOY growth in our client base to 7.3 million in November 2021 as against 3.2 million in December 2020. Growing client base resulted into higher active client base, rising average daily turnover and expanding turnover market share to 2.9 million, Rs 7.2 trillion and 21.0% in November 2021 against 1.2 million, Rs 2.6 trillion and 18.0% in December 2020 respectively.

Multiple factors have led to this growth. Firstly, our bouquet of products and services like the rule-based investment engine ARQ Prime, investor education platform Smart Money, among other solutions like SmartAPI, SmartStore, Smart Buzz and Angel BEE, help investors to make informed decisions about their investments. We also offer a flat-fee pricing structure, including zero charges for delivery and Rs 20 for intraday trade. At the same time, we deployed several strategies to reach out to potential clients in different parts of the country. The stock market participation in India remains extremely low at around 5%, which means there is a lot of growth potential. We will continue our efforts to encourage GenZ and millennials and help them in their wealth creation journey.

We are also expanding our range of services and will diversify into AMC business, and scale up our distribution of third party financial products to cater to all the financial needs of GenZ and millennials.

Showcasing the technological prowess of Angel One and how it makes customers’ lives simpler?

At Angel One, we have understood quite well that new-age investors, who are digital natives, want everything at the touch of a button. They appreciate the seamless experience offered by easy-to-use platforms. Keeping this in mind, we have built state-of-the-art tech-enabled platforms that make their investment journey a smooth ride. For instance, we know that these young investors may not have enough knowledge about the stock market. Thus, we have introduced a platform like Smart Buzz and Smart Money. While Smart Buzz is a one-stop destination for all business news, Smart Money is a carefully designed educational platform. It has lessons for everyone, from beginners to experienced investors and traders. We also support our clients with digital advisory and chatbots. For Options trading, we recently launched the Insta Trade feature on our Angel One mobile trading app. We have also partnered with Sensibull to enable our clients to undertake Options trading using tools on their platform. Furthermore, our rule-based investment engine ARQ Prime adopts the time-tested and proven rules for investing in stocks. In investing - it is called Smart Beta. It scans all types of stocks to pick Winners: Value stocks, Quality stocks, High Momentum stocks, Growth stocks across the market cap. We also offer third-party integrations like Vested, Streak, smallcase, etc. Vested allows our clients to invest in US equities. With smallcase integration, clients can buy curated baskets of stocks or ETFs based on an objective, theme, or strategy. Then there are platforms like Streak that equips investors with plans and manage their trades by deploying systems that do not require prior coding knowledge. Our target is to empower investors to secure their financial future by providing them access to diversified asset classes.

How Angel One has been a trailblazer when deploying new technology and leading disruption in the industry.

India has around 5% penetration, which is far lower compared to China and the US. We have an established history of using technology to our advantage and that is seen from our robust client acquisitions. Our aim is to democratize investing by making it accessible to everyone in India. We have already incorporated the functionality of multiple languages into the app. We are extensively using AI and ML to smoothen all the journeys and provide the best experience to our clients. Moreover, we are also aggressive on the digital marketing side to deepen the penetration of investing culture in Tier 2, 3 and beyond cities. We are not just looking at multi-functional apps but also hyper-personalised apps for GenZ and millennials. While multi-functional apps are the need of the hour, as new-age investors prefer to manage all their finances through one platform, they also look out for companies that understand their needs at the individual level. We are constantly in the process of becoming a platform that caters to the needs of young investors.

How does Angel One build teams, operate them, and speed up decision-making, all of which contributes to long-term value?

A company is, what people involved in it make it. The success and failure of the company entirely depends upon the strength of its human capital. That is why we provide an inspiring work environment to our employees, which helps them in enhancing their capabilities. We introduced Angel Broking Capability

Development (ABCD), an AI-enabled systematic approach to bring sharp focus on building capabilities & offer hyper-personalised learning journeys. We also organized various workshops for our talent pool. We have a Failure Club where Angelites share their learnings from their past failures, and how they implemented their learnings and succeeded from the failures. We also have our design lab sessions, which promotes innovation and works towards the common goal i.e. 100% client satisfaction through process changes and new products. Inspired by the work culture in Silicon Valley, we introduced something called product pod. Here people from cross-functional teams like marketing, sales, development, analytics come together to brainstorm a problem. It gives a 360-degree exposure to the idea and enables us to build a customer-centric solution.

How do fintech players redefine investing and trading in 2021, how will it be in the year 2022 for the fintech industry?

Fintech players have invested heavily in technology to build user-friendly platforms, facilitating the expansion of markets. Digital brokers have further opened up newer markets. They have redefined investing and trading by making it accessible to everyone digitally, through smartphones and websites. Digital brokers now have a larger share in incremental active clients and will over time dominate the market. It is because of the digital brokers that retail participation in the markets has improved and their share in overall turnover has grown steadily. They have democratized investing and trading with a renewed pricing structure. The stock market, which seemed limited to those in urban areas with the knowledge of day-to-day market development till a few years ago, now has young investors from Tier 2, 3 and beyond cities. Digital brokers, like us, are going to drive future growth in the industry. Fintech players are largely going to focus on improving client experience. GenZ and millennials are digital natives and give extreme importance to their experience while using any app or website. Hence, we give a lot of emphasis to feedback. We use clients’ feedback to improve user experience and evolve as a fintech company. Another emerging trend is the multi-purpose app. We will see a lot of fintech platforms offering a variety of financial services and not just investing and trading.

What is the market potential for next year due to tech-enabled solutions?

We are seeing good participation by retail players and expect this trend to continue in the coming years as well. Large players are gaining market share and it is likely that this momentum will continue. As a digital player, we will also keep making deeper inroads into Tier 2, 3, and beyond cities and expand the overall market pie. As a fintech player, we will leverage our digital capabilities to consolidate our leadership position further. We will provide solutions and ease of use that attract the youth, GenZ and millennials. As retail participation in the market grows, there will be greater diversity in a holding pattern. This will lead to broad basing of the markets, providing greater stability. We foresee greater participation in equities with low inflation and interest rates as they offer superior returns over other asset classes.

Share brief on a technologically-led strategy to further scale the business?

The tech-savvy generation prefers always staying connected and having smartphones at the heart of everything. So, it is imperative to ensure that their needs are effectively met via this channel. They also prefer digital-first services and need technological interventions across all consumer touchpoints.

We have used technology and have transformed the broking industry. Next we plan to use our technology skills to transform the asset management business as well. We have applied to the regulator for setting up our own AMC and expect the approvals to be in place over the next 6-8 quarters. Here we will offer passive and smart beta products and utilise our digital strength to distribute the same. In addition to the AMC business, we also plan to scale up our distribution business and redefine ourselves as a formidable player in the Wealthtech domain. We are planning to launch our Super App over the next few quarters, which will enable us to offer our clients a wide array of financial products.