After volatile 2019, what’s in store for stock markets next year?

Advanced technology infusion has become the holy grail in protecting investor interests amid an economic slowdown.

Constant technology evolution has revolutionized the Indian market. The Indian stock market, too, is witnessing effective growth backed by advanced technologies and smart products. The new age of stockbrokers is technologically driven, overpowering traditional broking houses and investors. According to a report by Kantar IMRB, India’s internet users are expected to reach 627 million in 2019, and the number is expected to reach 800 million next year.

The penetration of the internet and smart devices in the hands of a majority of the population is changing the capital market landscape. Due to advanced technologies, more innovative platforms are being created to let investors invest with ease and earn improved profits. Thanks to technological advancements, Investors can now invest effectively and easily, but what do stock markets have in store for them in 2020?

In lieu of increased digitization, the government is expected to further push its efforts to increase financial inclusion. In the government’s target of 300 million digital payment consumers, more stockbrokers are expected to adopt e-trading practices to utilize technologies to their full potential. With digital platforms offering more user-friendly investing features, investors too would benefit as they will be able to invest more easily, quickly and strategically.

Similarly, within the technological revolution, most stockbrokers would look to increase investment in speed and precision. SEBI itself plans to invest around 500 crores in 2020 to introduce various Information technology projects in India to focus on models that would prevent tax avoidance, money laundering, round-tripping and increase technological inclusion. The projects will introduce platforms backed by AI, ML, big data analytics, pattern recognition to offer robust investing options and platforms.

SEBI shall contribute further through the planned Innovation Sandbox, where more market-related data will be available to fin-tech firms to analyze investor patterns and increase profits. The sandbox will allow the firms to test their innovations related to the capital market and create an efficient, fair and transparent securities market ecosystem.

While the technological upgrades shall benefit investors, glitches often force investors to lose huge sums in a matter of minutes. To remedy this situation, SEBI is expected to launch a framework in 2020 to impose financial penalties for technical snags and glitches. The quantum of penalty will be based on the time for which the glitch would have occurred. Along with the penalty framework, a cyber capability index will be launched to strengthen cybersecurity and protect investor interests.

Advanced technology infusion has become the holy grail in protecting investor interests amid an economic slowdown. The government too is making increased efforts to aggressively bring in digitalization and innovative technologies which would add to the growth of the Indian stock market. In 2020, the Indian stock market is expected to reach new heights based on the government’s policy framework for technology along with heavy investment. With a total market capitalization of more than US$2.27 trillion, the Indian stock market is expected to rise in its valuation if the government’s policies of 2020 are implemented in their full capacity.

(The author is CTO and co-founder at UPTSOX. The views expressed are the author’s own)