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V. Rishi Kumar

Investor rules. No, we say this not only because the markets are up. Technology too has played a part. Here's a case study of a brokerage that offers online trading.

THE stock markets are on an upswing. You want to bet on your cash on a few stocks to see if you can triple or even quadruple it in a year - even if some tell you that the worst time to invest in the stock market is when it's on an upswing. So you call your stockbroker. So far, so good. But what is different in this scenario now as compared to say, five years ago? You can actually view the latest stock market information on the Web from your desktop as you call the broker on the phone. And now, there is little chance that the broker buys it at a lesser price and quotes a "marked-up" price to you. And, brokers can make and break deals as per your instructions even as they hear your instructions on the phone. Brokers too have moved away from the system that made their voices hoarse with bidding and selling, to silent and efficient computers. Some brokers have innovated further to allow online trading by individual investors through the brokers' platforms. Which means, you do your own thing with your stocks.

It's been sometime since online brokering came into play. So, eWorld thought now was a good time to see what role technology has played in all this. Here's a case study.

Srikant S. Rao, Country Manager of BEA Systems, told eWorld that the traditional pattern of stockbrokers will have to change as the regulatory practices force them to adopt to new technologies. Technologies that help them reach larger groups across the country while bringing in much needed transparency.

When SSKI Investor Services, one of the largest brokerage solutions providers in the country, wanted to change from the traditional trading pattern and re-define its business approach and create an online trading facility like eTrade, they decided to adopt BEA's WebLogic platform to provide online trading application, says Surendra Baliga, handling security at BEA Systems.

With BEA's Weblogic, Sharekhan, the company's online portal, is now able to provide customers with reliable, secure, faster and a problem-free trading platform. This, in turn, will enable Sharekhan to focus on providing its customers ease of transactions and overall customer satisfaction, which is critical and gives them an edge over their competitors, Rao says.

The BEA's technology platform houses the business logic to interface with the diverse components while providing end-to-end transactions in a secure 128-bit encryption format. This solution, says Rao, has enabled Sharekhan to integrate the various components of Web trading that encompass bank interface, depository participant and broker account.

This application is complemented by various invisible components into a single and yet scalable entity. This would optimise the architecture and help quickly scale to any level as required by the business. Look at the advantages of such a system as opposed to the limitation of a manual trade a broker could once handle per day, he explains.

From Sharekhan's point of view, it needed a system that would be secure, scale up effortlessly as and when required and integrate with various technology applications. In turn, this would enable the company to build on the existing legacy systems, provide faster time to market while interoperating with other environments from different environment within the financial ecosystem.

Ketan Parekh of SSKI says the overall objective of this Sharekhan initiative has been re-thinking the way they do business. "Sharekhan has been able to access more people, offer personalised service and reduce cost of transactions. Significantly, we have been able to match user expectations. This has made us much more competitive while providing interactive voice response-based trading in a secure environment."

With this initiative, Sharekhan's core business logic and risk management, which is central to application server framework, has facilitated the portal to offer trading to its customers through multiple channels — Web, IVR (interactive voice response system) and now through SpeedTrade, a real time broker trading terminal. SpeedTrade has reduced time lags, which were constraints of Web architecture, to ensure that trading even through the Net would be virtually as real time as trading on a Broker's terminal.

As a result, Sharekhan has been able to see volumes leapfrog as also transactions handled by the system without any slumps in performance . It opened up a whole range of new investors from all over the place while empowering the investing public.

For instance, in India, investment in shares was restricted to a few thousand high net-worth individuals. This has now moved to a much more broad-based investing community. The burgeoning middle class with increasing disposable incomes has widened the investor base. As the investing community has grown many times over the last few years, technology, as in the case of Sharekhan, has helped investors to trade on a virtual platform. This is some thing that would get broadened as more brokers seek to adopt these technologies not out of choice but out of compulsion. Unless they change, they will not be able to keep pace with others who have taken to new technologies, Rao says.

vrishi@thehindu.co.in

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