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Investments can seem like a complex game. As per a survey, about 64 percent of young Indians are unsure of what to trust when it comes to investing. A main reason for this has to be the complexities and jargons that are attached with the fintech space. To simplify finance, TechSparks 2022 saw an interesting panel discussion ‘Simplifying finance & investing for young India’ with Sumit Chanda Founder and CEO, Jarvis and Paddy Raghavan Co-Founder, Multipl.

The discussion revealed the current investment trends and how new-age fintech companies are building platforms that are simplifying how young Indians borrow, invest and save using technology.

Insights into the current gen’s investment plans

Sumit claimed that Gen Z is actually quite smart with their money. “I’ve seen people save from their internship days, getting into mutual funds right from there,” he said. These habits aren’t those that millennials share. People still rely heavily on FDs and RDs when it comes to long-term goal planning. “They can use half of this money in mutual funds or other products,” he added. But it isn’t too late. He said that there are opportunities to do proper asset allocation for millennials in their 40s as well. One must do proper asset allocation, identify goals, when do you need money, how many years do you have for the money, what sort of risk can you take, etc.

Paddy added that Multipl consciously took the decision to tell people to invest for their spends. While goal-based investing has been the norm, Paddy wanted to bring in a different angle where they ask people to invest for their short-term spends. “Data says we leave 60-65 percent of our money in savings accounts where we get 3 percent returns. Inflation is at 7 percent so we are practically losing money by keeping it in the bank,” he added.

Simplifying finance

Jarvis, a stock investment platform, uses technology to understand the analytics around the equity markets. The team goes through a lot of information from the global markets, pertaining to the Indian market. “We make use of this information to create a lot of smart analytics on our platform. There’s a level of hyper personalisation. So when you register, you get a personalised portfolio for your shares. We also have a risk management system which manages your investments throughout the investment cycle. This entire process happens autonomously,” Sumit shared. Jarvis has also been simplifying finance by leveraging AI. “AI is used everywhere, then why not in investing?” he added.

Multipl meanwhile is trying to leverage the category ‘Save Now, Pay Later’. Paddy explained that the aim is to put more money on the table for the customer. From an economic standpoint, it beats every other alternative. “We are so tuned to instant gratification, the main question I’m asked is ‘credit is so easily available, why should we wait for a product purchase?’ We don’t want to fight instant gratification. Because on one side you have the lure of credit, and on the other side, you have greed for higher returns, which pushes people to high risk products. Our focus is on spends, which you can plan,” Paddy said.

Expert advice and tips

The past few years have seen tremendous shifts with the pandemic and the war. Sumit believes it gave a push to the equity market. In India, a lot of money is relegated to real estate and gold investment. But he believes that from a long-term perspective, a proper asset allocation needs to be done and a lot of emphasis has to be given to equity. “I am very bullish on equities, be it in the form of mutual funds or direct equities. Eventually you can start diversifying into real estate or other asset classes. By that time, you will be sitting on a pile of money thanks to equity,” he advised.

Sumit believes that one should never put all their eggs in one basket. “Diversification is the key,” he said.