WEALTHTECH
Stacksof of pottential A new-found interest in investing online, and a determination to take control of their finances, is driving India’s digitally-savvy millennials to demand a new kind of service. Smriti Tomar, CEO and Co-founder of Stack Finance, knows exactly where they’re coming from… For decades, India has rejected the stock market. A meagre two per cent of people there invest, compared to seven per cent of their near-neighbours in China, and a whopping 50 per cent of US Americans. Instead, parents, grandparents and great-grandparents have tended to secure their offspring’s future in gold. Indian households hoard around 25,000 tonnes of the stuff, making them the largest domestic gold-holders globally. A 2020 study by PGIM India Mutual Fund reveals that retirement planning is low on the list of priorities for Generation X and baby boomers. Many spend their savings
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TheFintechMagazine | Issue 18
on lavish weddings for their children, who are expected to take care of them later. But India’s youngest generations are different: they’re more mobile and less tied to tradition. Thirty-four per cent of millennials and 40 per cent of Gen Zers want to move away from their family’s locality, compared to just 27 per cent of older generations, so that now only 37 per cent of India’s pensioners live with younger family members. Couple that with the fact that 68 per cent of millennials treat technology as their ‘sixth sense’, and the fact that the median age in India is just 26, and change seems irreversible. The COVID-19 crisis has only served to confirm that. Since the pandemic, the number of people opening damat (or securities holding) accounts hit record highs, with 2.4 million opened between March and June, an increase of 5.6 per cent. Trading platform Sharekhan reported a 95 per cent jump in activity over May and June, with 60 per cent of its customers being millennials. And SamCo saw new accounts grow by 150 per cent over the same period, with 65 per cent of its customers aged between 21 and 35. Online trading broker Zerodha is adding double the number of accounts per month, compared to pre-crisis, and trading activity is up 50 per cent. India’s young adults are hungry for digital wealth. Capitalising on this trend is Stack Finance, co-founded by dynamic CEO
Smriti Tomar, Vidit Varshney (COO), Yashwardhan Pauranik (CPO) and Tushar Vyas (CBO). This soon-to-launch, all-in-one personal finance assistant and automated investment service is built for India’s 400 million-plus millennials, by millennials. Tomar is one of the two or three per cent who do actively invest in the markets. Ever since her student days she’s had a passion for money management and investment – inspired by reading a Warren Buffett book at 16. Soon, she was the go-to girl for family and friends who struggled to handle finance. In college, she began working for a startup and invested her stipend in stocks. Eager to increase her knowledge and expertise, she studied books, took courses and tried out products to plan her financial life. But she found it all ‘so confusing and tedious’ that she quit to launch Stack Finance, initially as an offline financial management service. It wasn’t long before the team launched a digital version in beta, leveraging artificial intelligence and machine learning to create a personalised, automated financial advisor. It’s a mobile ‘super app’, which stacks all a person’s financial assets and liabilities in one digital drawer and helps to manage them, pointing towards investment opportunities. Tomar likens it to Mint in the US – only better, in her view. www.fintech.finance