September 24, 2017

My experience in opening a trading account online then and now

I have been trading a while with Upstox (formerly RKSV). This account was opened online I think 2-3 years ago. The process was fairly simple - you fill in a form online with all details. Once completed, the form is emailed to you so you can take a printout. Then sign and courier the form with whatever supporting documents and your account is set up in few days.

Fair enough... it was revolutionary then but no big deal.

Recently I created a trading account for my daughter and noticed a huge change in procedure. The key difference was PAN / Aadhaar card number was used to autopopulate the application form. In addition, certain mandatory documents like PAN card, cancelled cheque, ITR return was to be scanned and uploaded online.

Now the application workflow uses OCR technology (nothing new but very relevant in the application process) to recognise the characters in the scan to verify if the document uploaded is correct or not. Similarly, the cancelled cheque scan had a automatic check to confirm IFSC code, account no and verification that name on cheque matches the real name on application.

The process was not without hiccups though but after 2-3 attempts it went through.

Lastly, the application was digitally signed using OTP on mobile number associated with the Aadhar card.

The OCR use and digital signing was truly revolutionary... there was no print out required, no physical signatures and no couriering of documents.

Now this has serious implications going forward. The technology eliminates a huge amount of physical processes and reduces time substantially. It also ensures clean information and no fooling around.

I think with all these innovations, banking and financial services industry will no longer be the same. This has huge negative implication for PSU banks who are slow in modernising while at same time creating opportunities for  tech savvy banks in the future.

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