Bid, Ask, Hang Up

Over the next few years, your friendly broker, ever so willing to fill up your application forms and run around for you, will shrink and shrink so much that you can place him in your pocket.

Not really. But, a lot of what a broker does today, you will be able to do over your mobile phone tomorrow. It’s not difficult to see why. Once 3G (shorthand for third generation technology that promises broadband on your mobile) is in place, there is a lot more that you can do with your handset. Including making money.

 

Illustration: Malay Karmakar

To get a sense of how it will be, look no further than trading shares online. From less than 2 percent of total trades on NSE in 2002, online retail trading has gone over to 20 percent now. Average brokerage on online trading is 25-30 percent lower than offline brokerage, says CLSA. Some of these trades happen over mobile phones. ICICI Direct and Reliance Money, for example, offer lighter versions of their Web sites for handsets.

Now, mutual fund investors can do the same. Recently, NSE and BSE opened their platforms for MFs, which makes buying and selling of units as easy as trading a share. BSE also said it would allow brokers, and eventually investors, to buy and sell MF units over mobile phones. (Add to this the fact that SEBI, capital market regulator, scrapped the upfront agent commission.) This would redefine the role of a broker, says Rajesh Krishnamoorthy of iFast Financial, which provides mutual fund distribution platform for independent financial advisers. A significant portion of a broker’s time is spent on managing documents. Moving them online would free up their time for providing advice to the customers, he says.

Insurance is another area dominated by agents. That could change too. Today, Religare Aegis sells term insurance only through the mobile phone and Internet. The premium is less than half the amount that other insurance companies charge.

If cost is one driver, convenience is another. An art auction is often associated with the rituals and drama of a brick and mortar world. But that could move to your mobile too. Safronart has galleries in Mumbai and New York, but it sells most of the art work through online auctions. It also launched an iPhone application for mobile bidding. In the next few years, the range will increase, as will the providers of such services.

Mobile phones are just a part of disintermediation that started with ATMs many years ago. ATMs took the teller out of your life. Now that ATM itself can be opened on your mobile phone, says Nagaraj Mylandla, CEO of technology firm FSS. With the technology that’s available today, you can use your mobile phone as an ATM (with an ATM screen coming on your handset), except, of course, for drawing cash.

A mobile phone’s role as a provider of information and enabler for decision-making will be equally important to investors. It’s already possible to get real-time information on stock price movements through Live Market Watch (promoted by former test cricketer Brijesh Patel), or TickerPlant. It won’t be long before we get to see more tools such as real time technical charts, says Mahavir Chand, co-founder of GoDB Tech, a mobile technology solutions company.

The trend is being driven by a combination of factors, says Romal Shetty of KPMG. Mobile phones are becoming more powerful and cheaper. Regulations are coming into place. (Recently, Reserve Bank of India relaxed cash transaction limits for mobile banking.) 3G will let you access data much faster. Unique identification number programme can be tapped for some of the transactions.