The capital and commodity markets were not shut down even for a day, owing to COVID-19. In fact, it has taught broking businesses many new lessons and the need to rethink the business model. Nirmal Bang Securities Director and Head of Retail Segment and seven times international full marathon runner Rakesh Bhandari spoke to Moneycontrol.
Edited excerpts:
Q: How have you managed business during COVID-19?
A: COVID-19 has definitely changed the way businesses are conducted. Nonetheless, workplace safety is of paramount importance. Nirmal Bang employees have been instructed to work from home. Less than 10 percent, mostly from the IT and Risk Management departments, go to office as it is difficult to offer these services from homes.
Q: Has your business been affected?A: Our business has not been affected much by COVID-19 as we had gone online much before the pandemic. On the contrary, online business has improved by nearly 70 percent from 45-50 percent earlier. I must say that client participation has increased a great deal during this global health crisis.
Q: How will you manage business after COVID-19? Will there be any change in strategy?A: It is premature to say how things will pan out after COVID-19. Nonetheless, we now realise that working from home is easier, more convenient and safer, too. However, we cannot deny that face-to-face interactions can never be eliminated or replaced by the convenience of technology. What will, however, change, post-COVID-19, is that more and more employees will be allowed to work from home. This change will encourage and motivate even stay-at-home mothers to not quit their jobs or end their careers, mostly to raise kids or to devote time to their families. I believe flexible working could be the new normal, and the sooner we realise this, the better it will be for all of us.
Q: What has been the major hurdle during the pandemic?A: We definitely miss interacting with clients on a personal level. Things are no longer the same with an interactive platform like Zoom, although its advantages cannot be ruled out. Coordination was slightly difficult, owing to weaker bandwidths and connectivity issues during the early part of the lockdown. Furthermore, an office set-up is more professional and organised. But things have smoothened gradually and people have adapted to the changing times.
Q: Do you see any retrenchment in the industry?A: I do not see heavy retrenchment in the financial services industry. In fact, businesses are continuing to hire people. Hiring at Nirmal Bang is going on unabated. We have recruited a few people even during the pandemic. There is plenty of room for growth in the industry. In fact, this industry requires more people to reach every nook and corner of the country.
Q: Do you see any disruption in the broking space after the entry of start-ups?A: No, I do not think that start-ups will be a disrupter. They will, in fact, help increase penetration. At the end of the day, we need more participants and healthy competition. This will be a win-win scenario for users as increased participants will see more options for users to choose from and better quality of service.
There is no doubt that start-ups will be accessed more by millennials as they are more tech-savvy. However, it all boils down to sound investment advice. So, I believe customers will go to traditional, yet modern businesses like ours for the right advice that is backed by years of experience. This will help them create wealth as well as healthy investment portfolios. We definitely need more start-ups for enhanced penetration as well as to reach a wider population.
Q: Do you have any plan of launching discount brokerage?A: No, there is no plan as of now.
Q: Could you tell us about your plans in the mutual fund segment?There is a huge scope in the segment. Assets under management (AUM) today are a whopping Rs 27 lakh crore, compared to Rs 5 lakh crore in 2008 -- a growth of 13 percent (114 percent CAGR) as per AMFI data.
While there are 1.25 crore insurance agents, only a lakh serve investors as mutual fund distributors. For tapping the mutual fund market, Nirmal Bang Wealth Solutions (NBWS) is offering Investorial, an online portal and application for information related to mutual funds. Investorial equips distributors with the necessary knowledge and know-how to ace the numbers game and stay ahead through data and analysis of the industry, making it a one-stop platform for information that a distributor would need at his/her disposal.
