India's investment landscape is changing rapidly as technology makes stock market participation easier and more affordable. In an exclusive conversation with The Free Press Journal's Sheryll D’Souza, Gaurav Seth, MD & CEO 5Paisa Capital discusses discount broking, platform reliability, algorithmic trading, artificial intelligence, investor protection and how the company plans to expand beyond trading towards long-term wealth creation for retail investors.
What exactly is discount broking, and how does it benefit ordinary investors?
Discount broking essentially means allowing people to trade and invest easily at minimal cost. At 5Paisa, for example, the brokerage can be as low as Rs 20 per trade. Technology makes this possible. Once a platform reaches scale, the additional cost of processing transactions keeps declining. We pass these savings to customers, making investing more affordable and accessible.
How has technology changed the way Indians participate in stock markets?
Mobile phones and UPI have completely transformed investing. Earlier, investors depended heavily on brokers and paid percentage-based commissions. Today, people can independently invest through their smartphones. This has helped us reach smaller towns and rural markets. We were positively surprised by the surge in retail participation after Covid. However, some investors entered during the excitement without fully understanding the risks.
How do you ensure your trading platform remains reliable during extreme market volatility?
Reliability is probably the most important part of our business. Trading volumes are concentrated during certain periods, particularly between 9:15 am and 10:30 am. Unexpected events can create sudden spikes.
Our engineering teams continuously review platform performance to prevent disruptions. We also consider customers using slower mobile networks in smaller towns. The objective is to ensure trades are executed smoothly without delays or technical failures affecting investors.
Do you consider 5Paisa primarily a financial services company or a technology platform?
We have always approached the business as a technology-enabled investment platform. Finance remains our core business, but technology is our competitive advantage.
As competition increased, we realised that technological excellence would differentiate us. Speed, reliability and customer experience are critical. Investors may initially join because of an offer, but they remain because the platform works consistently.
Why did 5Paisa decide to rebuild its trading platform?
Over time, products undergo numerous incremental changes based on customer feedback. Eventually, we realised that making small improvements was no longer sufficient.
We decided to rebuild the platform while continuing to operate the existing business. This was challenging because customers were already actively using our services.
The redesigned platform focuses on faster execution, improved reliability and a contemporary user experience. Our customers range from young investors to people above 60, so simplicity matters enormously.
Algorithmic trading was once dominated by institutions. How are retail investors accessing it today?
Algorithmic trading means creating predefined conditions under which trades are automatically executed.
Earlier, technically skilled investors connected their programs to brokerage platforms through APIs. Today, technology has made these systems more accessible to ordinary investors.
Regulatory frameworks have also improved transparency and accountability, particularly for brokers. However, automated trading does not eliminate market risks. Investors can still lose money and must understand the strategies they use.
How important is regulation in protecting new investors from misleading promises?
Regulation is extremely important because financial markets attract bad actors who sometimes impersonate established brokerage companies.
Credible platforms cannot make unrealistic promises or misrepresent investment returns. Even the presentation of performance data is regulated.
Our reputation depends on customer trust. Investor education, transparency and compliance are therefore essential. People must understand the risks before participating in sophisticated trading products.
5Paisa has partnered with OpenAI. How will artificial intelligence change investing?
AI can help investors become better informed about their financial decisions.
We are developing conversational features that allow customers to understand portfolios, mutual funds and financial ratios through simple questions.
For example, someone examining a mutual fund could ask what a particular ratio means and receive an understandable explanation.
The objective is to make financial information accessible without requiring extensive technical knowledge. AI can provide contextual assistance similar to a digital wealth-management companion.
What safeguards are necessary when introducing AI into financial services?
We cannot simply integrate an AI model directly into a regulated financial platform. Additional safeguards are necessary.
We build layers that define what the system can and cannot do. Extensive testing is required to reduce incorrect or misleading responses.
Importantly, AI cannot provide personalised investment recommendations unless the necessary regulatory permissions are available. If customers ask which stocks they should purchase, the system must respect those boundaries.
What is the next growth phase for 5Paisa?
Our priorities are customer growth, technological innovation and meaningful AI integration.
We want to create one of the strongest technology-driven investing platforms while continuously improving customer experience.
Another important direction is expanding our product offerings beyond futures and options trading.
We want customers to look beyond short-term transactions and focus on building sustainable long-term wealth. Technology should make that journey simpler, more informed and accessible.
