Financial Growth Story Scripted By Technology

Number crunching has never been more interesting than when measuring the impact of technology on an ordinary life. Every minute, the world buys stuff worth over $850,000 online, puts in 3.7 million searches on Google, sends 18 million text messages, 38 million WhatsApp messages, 187 million email messages, views 4.7 million videos on YouTube, watch Netflix for 266,000 hours, swipes Tinder 1.1 million times, downloads 375,000 apps. The world has over 6 billion mobile phones, 3.6 billion Internet users, 450 million Wi Fi networks, etc.

The annual growth in each one of these is even more baffling.

The story in India is nothing less impressive. India will have over 500 million smartphones in 2020 from 330 million in 2017. In 2020, we will have over 650 million online citizens and over half of them would prefer to converse in non-English languages.

It is said that India is a rich country inhabited by poor people. With a GDP of about $3 trillion growing at a rate of about 7% annually, with a population of nearly 1.30 billion and middle class of over 500 million, we have only 62 million Mutual Fund accounts and 30 million Demat accounts. Remember, there is a fair degree of duplication in these. Unique Demat accounts are only estimated to be around 15 million. Of these, no more than 20% are active. A dismal figure of 3 million active stock market investors. Surely, India can invest its savings better.

These numbers are growing rapidly in recent years. The financialization of savings, rapid urbanization and high GDP growth coupled with sluggish record of traditional asset classes such as real estate and gold are helping in better allocation of savings across diverse asset classes. We have nearly 300 million new bank accounts opens through JanDhan initiative. Every month, over Rs. 4000 crores are invested in Mutual Funds through SIP. Heightened interest in the shares of NBFCs in stock is an indication of their acceptance.

All of these are being made possible by acceptance of technology in our lives. Technology has achieved what decades of planning, social welfare and political will could not. If we combine the two facts discussed so far, then we are about to witness a growth explosion soon.

The adoption of technology among youngsters is much more rapid. The potent combination of access to diverse asset classes through technology with the fact that over half of Indians are below 25 years in age is surely a great germination ground for some very interesting times ahead.

And we are not quite talking of Big Data, Artificial Intelligence, Internet of Things, etc. yet.