Are we ready to adopt OMS technology?

Mobile financial services (MFS) played a crucial role in promoting financial inclusion by providing services to individuals who previously did not have access to formal banking systems. Telecom operators, banks and other financial institutions also formed partnerships to expand the reach of MFS services. However, we have been unable to open up the stock market to the mass population. Except for Dhaka, Chattogram and Sylhet metropolitan areas, people in other regions are not aware of the stock market. At the district level, there are a few stock brokerages running the business in the form of digital booths.

Bangladesh had a relatively young and growing population, with a significant proportion in the working-age group and thus we have developed a tech-savvy generation. To achieve enhanced accessibility and participation in the secondary stock market, we need to educate the tech-savvy generation, where location or places should not be a barrier to trading in the bourses if you have an internet connection. This ease of access opens up opportunities for retail investors and small-scale traders, broadening the investor base and enhancing market liquidity.

The adoption of Order Management Systems (OMS) in the stock brokerage industry is relatively new and has been slow in recent years due to lower market turnover and bearish market trends. Amidst these challenges, many brokerage houses have been hesitant to invest in integrated OMS technology, fearing that the substantial costs may not yield immediate returns. As a result, implementing OMS technology in such an environment appears to be akin to acquiring a "white elephant" for the brokerage industry—a burdensome and costly endeavour that does not promise significant benefits in the short term.

In this scenario, the government's initiative to build a "Smart Bangladesh" stands in stark contrast to the struggle for making progress in the capital market. Despite the potential of OMS technology to streamline operations and enhance efficiency, the financial strain faced by brokerage houses has turned this innovative solution into a daunting prospect. With market turnover remaining low and stakeholders enduring prolonged losses, the implementation of OMS technology has become a challenging feat. Government support becomes paramount, providing the necessary financial and infrastructural backing to transform this endeavour from a perceived white elephant into a viable, market-reviving opportunity.

A consortium approach may prove effective in overcoming the financial barriers faced by smaller brokerage houses. Collaborative efforts among multiple market participants can pool resources and expertise to implement advanced technology solutions like OMS and app-based trading platforms. This approach can not only reduce costs but also ensure a standardised and unified technological framework across the industry. We have failed to capitalise on technology-based innovation, which has the potential to significantly impact the capital market and attract a larger segment of the population as investors. Embracing fintech advancements, such as user-friendly investment apps and online trading platforms, can bridge the gap between investors and the stock market. The regulator (BSEC) must remain proactive in adapting to the evolving market landscape, ensuring a robust, secure, and investor-friendly environment that encourages participation and bolsters confidence in the capital market.

Views are personal. The author is the Head of Operations and Compliance at UniCap Securities Limited. He can be reached at shahriar@unicap-securities.com.