HDFC Securities to start low-cost brokerage platform

Mumbai: HDFC Securities is working on an alternate tech-led platform to take on low-cost digital broking firms. The target segment for the new platform are digital-savvy millennials and generation Z individuals who are taking to the stock market in large numbers. This segment is comfortable with service without human intervention, is cost-conscious and participates in low-value transactions.

The broking arm of HDFC Bank, which is among the top full-service brokerage firms in the country has historically been tapping customers of its parent bank. This allowed the group to provide a three-in-one account where the parent’s savings and depository participant account enabled seamless transactions.

Speaking to TOI, Dhiraj Relli, MD & CEO, HDFC Securities said “We are a full-service brokerage firm. We are seeing over 92% of our customers are using digital channels for transacting and over 85% of our revenue comes from digital channels. We have seen a good increase in the last year”

“We are also upgrading to cloud-native technology which will enable much larger volumes in terms of transactions,” said Relli. He added that the transition was likely to be completed by the end of the fiscal year. According to Relli, there is a new opportunity opening up for these young customers who are cost-conscious. A key difference in the offering would be the unbundling of the three-in-one accounts where customers can link their brokerage accounts. Until last year HDFC Securities was linking the trading account to demat accounts of HDFC Bank. Last year the bank got demat account on its own. The new offering will allow the customers to link their trading account with any bank or demat account and enable transactions through a payment gateway.

“We do expect some cannibalisation of existing customers as the cost-conscious may move to the new platform,” said Relli. However, most customers are expected to stick around because of the value it provides through value-added products and a common relationship executive. According to industry sources, HDFC Securities has the highest revenue per customer among the large brokerage firms.