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Brokerages catching up on technology

Intro: Trivikram Kamath heads finance, operations and IT at Kotak Securities. But he has his eyes always on the technology options for the brokerage. Some of the insights

Indian banks, both in the public and private sector, have taken remarkable initiatives in inducting technology and automating their systems and processes. Most of them have moved towards centralized database and decentralized decisions making process. They do have quality manpower to implement state of the art technology solutions. By expanding the range of products and services, banks no doubt are able to improve the customer experience. However, that is not exactly the case with the other wings of the financial services industry, especially brokerages.

Says Trivikram Kamath, CFO & head of Operations & IT, Kotak Securities: “Banks today have an evolved model as far as technology infrastructure is concerned. The systems have been there for long and these have matured significantly. Besides, the banking sector is a large sector and vendors have developed systems to cater to a large number of banks. This has ensured that there are systems in place to meet all regulatory requirements and other checks and controls expected in banks. However, in the case of brokerages, industry being small and fragmented, there are not too many vendors providing comprehensive solutions and brokers implement their own systems to cater to business and regulatory requirements. So to that extent, it is not possible to compare the technology infrastructure of the two sectors or for that matter the prevalence of technology per se.”

He maintains this is only one aspect. The other is the size and scale of operations. Almost all the banks operate on a nationwide scale and technology is a very crucial factor in offering various services in a competitive and efficient manner – be it the ATMs, or internet banking or wealth management services or for that matter financial inclusion in a remote village. But, for brokerages technology nevertheless has to be the backbone in today’s scenario, but the level of its prevalence is not as it is in a bank.

“Thirdly,'” says he, “the vendors who are offering banking technology solutions are so evolved and upscale that they can envisage a situation and offer products and technology in a short span of time which invariably promotes adoption of better and mature systems by banks. Besides, customization and updating of software solutions are routine for these large vendors. But, that is not the case with brokerages. Most of the systems in place in these establishments are conceived and developed in-house as in our case and so very much custom-made.”

Security Concerns

In such a scenario, what are the major security concerns for IT people manning such infrastructure?

Kamath says it is a norm for every broker to have an IT audit conducted by a qualified auditor as per specifications laid down by the concerned stock exchanges.The audit also covers vulnerability access and penetration of the system and is done as per benchmarks set. As far as internal processes ensuring security are concerned, these are all well established practices, which include intrusion detection systems, access controls, elaborate security processes at the data center etc. “In Kotak Securities, we have implemented the highest levels of security to safeguard the customers’ interests. The trading platforms are secured with 256 bit SSL encryption as well as PKI. In addition, there is a 2-step authentication feature even at the account log in stage to ensure that the trading activities are completely private and secure. The access code is sent over SMS or email to the registered mobile number or the email account of the customer,” he adds.


Kotak Securities claims to be among the first broking houses in the country to make use of software in a big way to access the trading platform through the net. There are flexibilities available to the customers. The desktop applications and websites can be accessed through Windows based PCs as well as Apple machines while the mobile applications are available on Android and iOS. This means that no matter what platform the customer choses to trade on, the changes made are reflected in the account across all platforms.

“There are various types of trading customers who would prefer their own modes of trading,” says Kamath. He states: “We have customized our platforms to cater to their individual needs. Broadly, these are website trading where online trading customers can log to our website using their accounts and start trading right away, Xtralite where customers who use slow internet connections or access the website on their mobile phones, can avail a lighter, faster and more nimble version of our site, which offers most of the features of the complete website at much higher speeds, KEAT Pro X, which is a full-front end application developed by us and meant for serious full time traders, who can make use of the various features to manage their portfolio and also track market movements, create watchlists of scrips of interest, get stock recommendations from our research, etc, FastLane where customers need not download or run a software but can still trade online, access the portfolio and watchlists through a light Java based applet, StockTrader, which is a one of its kind mobile application that allows customers to access the stock market right from the mobile handset, and trade in equities, derivatives and currencies, track the markets and manage your portfolio while you’re on the move and Call & Trade, which is a facility for customers who are not internet savvy but can buy and sell stocks, derivatives, IPOs and mutual funds over the phone.”

Mobile Trading

For Kotak Securities, the Mobile Stock Trader is a unique application provided to the customers. Using a mobile, a customer can place a trade, view streaming quotes of favorite stocks, track live markets/ indices, create customized watchlists, view the day’s positions, track the portfolio performance, check available margins and also view intraday charts. Using the real time streaming quotes means users need not press refresh button to get the latest prices. Trades placed through the mobile app can be viewed, modified or cancelled through other trading platforms like KEATPro X, website, Xtralite or Call-and-Trade) and vice-versa. The app is available in major app stores. Even those who are not customers of Kotak Securities can register and use the app to gather real time information about markets. However, to do trading they have to open an account.

“The system is fully secure. Customer authentication is done through client ID and 2 levels of passwords, namely website password and security key code. The mobile device does not store the session’s details. So, each time the user wants to log on to the application, he has to enter his user ID and password. This enhances the security rigidity in case of loss of your mobile phone. And each session lasts for 15 minutes if no activity is done,” explains Kamath.

“We have 1,147 branches, franchisees representative/satellite offices across 367 cities, which handles more than 5,00,000 secondary market trades a day and a customer base of close to a million.”

No, the company is still to adopt BYOD as it needs to intensely look at security aspects.

Unique TVC

What are the major marketing initiatives, especially digital marketing, using social media?

Says Kamath: “We run highly effective campaigns. One of our very recent campaigns is ‘Start Now’ targeting investors in the age group of 25-60 years. It is a TV campaign encouraging potential investors to start trading in equity markets. The TVC depicts real life situations where the protagonist is impressed with his colleagues’ ability to understand and trade in the stock market confidently. Feeling left out and not wanting to further miss out, he starts his journey in the stock market with Kotak Securities. With the robust technology and strong knowledge being made available to him, he is not only able to feel part of the subsequent conversations, but is also able to trade confidently and come on top. Besides TV, the campaign will also use OOH, cinema, internet and other specially targeted advertising. Basically the campaign makes use of the research backed insights created in the company and use of ‘smart technology’.”

Kotak Securities believes in offering its research for free to the customers. It has a Kotak Securities Academy, which is a virtual knowlege bank for new investors – a complete, step-by-step orientation into the world of equities trading, currency, derivatives, mutual funds. This is an online resource freely available on the website that enables customers to be informed investors. Besides, all the research, insights, tips and tricks that the research team comes up with are published on different social media channels on a regular basis – financial concepts explained through interactive slideshows on Slideshare, follow Kotak Securities on Twitter for minute by minute stock market updates, share Kotak’s investing wisdom with friends and family on Facebook and How-to videos, in-depth investing guides on Youtube. Then there are SMS alerts on stock tips, recommendations, latest market news straight to the customers’ mobile phones and TradeSmart, a service that helps identify bullish and bearish trends in the markets.

Tech Infrastructure

What is the technology backbone of the company?

Says Kamath: “We have two trading systems. The offline trading system, ODIN, has been designed and developed by Financial Technologies. Having membership in multiple exchanges, we required a solution that had capabilities of executing orders in multiple exchanges and exchange segments by using a single application. The online system developed in house is a multi-exchange, multi-segment front office solution, essentially an integrated market watch that allows users to trade in more than one market by using a single screen. Moreover, with a real-time integrated order and trade book, users can get an integrated view of mark-to-market profits and losses, net positions, and exposures. It is a solution that is scalable and works across heterogeneous networks. It is developed on C and C++ platform and uses Sybase and MS SQL as database. This is the solution that some of our dealers too use.”

The company has a unique call center. Kamath says it is an integrated and geographically separated system, supported by a rich Interactive Voice Response (IVR) to improve automation. There is backend integration with the CRM package and this helps to improve customer experience and contact center efficiency. The system can handle calls seamlessly from any location. The integration of CRM package allows a 360 degree view of the customer to the agent, thus improving caller experience and agent productivity.

“We have a ‘courtesy callback’, which provides a call back option to callers who do not wish to remain in queue for a long time. Instead of waiting, the caller has the option to have his or her call returned when an agent becomes available. The callback solution is a method of improving caller experience in situations where they might otherwise experience long waiting periods. Another feature of the solution is that the customer can opt for a language of his choice and a suitable call center operator will be assigned to attend to his queries. At present it caters to 8 languages. The center also handles in addition to customer-related calls, calls pertaining to Call and Trade, which is of substantially high volume. We had the call center operations outsourced earlier, but it is now a co-managed call center. It functions froom Mumbai and Ahmedabad with about 200 seats,” concludes Kamath.

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