Bringing the casino home, it's got handy

NSE, India's first electronic exchange, began trading in 1994 to the accompaniment of this newspaper announcing in its headline that the country's 'biggest casino is born'. Over the course of a generation, Indians have demonstrated a remarkable resilience to this genre of 'gambling'. The number of demat accounts was minuscule till five years ago, and MFs had a job on their hands, selling their wares beyond cities. The picture changed dramatically as the smartphone reached every hand and democratised investing. Demat accounts are witnessing explosive growth and MFs are routinely counteracting global capital's egress from Indian equities. The concern over 'gambling' has also resurfaced, fed by retail interest in esoteric trading like derivatives. Regulators have had to step in to tame speculation in options trading where India had reached a staggering three-fourths of the global volume.

Would this have been possible if smartphones hadn't become ubiquitous? Probably not. But it's not the only reason for the rise in speculation. The past five years have been a rollercoaster ride for financial markets. Interest rates collapsed during the pandemic, the economic recovery was led by profits instead of wages, and bank credit started chasing households instead of companies. These are all contributing factors alongside the gamification of trading that shoulders an inordinate amount of the 'blame'. The argument that technology has rendered gatekeeping redundant misses the point that it is still being done for investors, and there's little to be gained by imposing restrictions on communications devices. Regulators have gone into new territory where content around investing needs to be curated.

Democracy is a messy business. But outcomes are typically superior to other forms of decision-making. Tech reinforces our attitudes towards preservation of capital, and a generation ushering in India's cult of equity will acquire its own discipline around investing. For that, it needs all the tools technology enables to make informed choices about wealth.