The reason and the driving force of this change is the Indian youth. They have moved away from traditional investment options such as FD and gold.
Instead, they have turned to shared mutual funds and other financial tools that promise them better returns.
The pillars of this boom are websites and apps that not only provide transactions but also financial advice. These apps aid trades in the share market, IPOs, SIP, mutual funds, indices and commodities.
Many apps such as Upstox, Groww, Stack, Pickright Technologies and Zerodha has seen an increase in the number of new customers, the majority of them are youngsters. The youngsters prefer it because it has become a trend.
FD has lost its attraction since it gives poor returns. Youngsters want funds kept in check with inflation and provide tax advantages.
Another reason for this, is that they consider early investment essential to gain experience and wisdom in the market. It is not just about the investment amount but about the result. They consider it necessary to invest early, smartly and after heavy research.
The benefits of early investment are that it allows you to make mistakes and learn from them, imparting financial discipline. It helps in developing financial independence, financial security and stability. They turn to YouTube and apps for investment advice.
The Internet is the great rail line over which this huge train passes. Another medium where they get necessary advice is social media.
Social media is many things for youth when it comes to financing. From seeking jobs to market advice, their financial application is strong.
The greatest testimony for social media power over the market is the GameStop-AMC incident.
To exploit this new market, the apps either advise through the app or through their YouTube channel. Companies like Groww, impart market knowledge in diverse ways, ranging from YouTube videos to webinars.
The trading through apps made it easy for them to invest in the market which attracts many to it. Then the pandemic induced financial insecurity and the search for alternatives led to this.
This has led to rising financial literacy and will boost the fintech sector more.
Another factor that led to the explosion of the sector is the expansion of infrastructures, such as high-speed internet and cheap mobiles.
They are not just investing using the app they are diversifying the portfolio too, with some even extending to cryptos.
Fintech might have opened the doors for easy transactions, but it still has risks. Thus, research is a must before investing.