Buy Now Pay Later

Context in the Indian equity trading eco-system

Product Brief

Indian equity trading eco-system has a concept called Margin Trading Funding (MTF) through which traders only need to pay an initial margin to buy stocks. Rest of the stock buy value will be funded by broker. Buy Now Pay Later at IIFL Securities was a medium to create transparency in the MTF segment for the clients at IIFL Securities.This product allows anyone on the trading platforms to buy stocks with lesser margin (or buy more quantity of the shares), get real-time confirmation on funding, know the interest being charged, repay the funding etc. without any need of external assistance.

My Role

As a project for capturing new digital revenue channels at IIFL Securities, I was leading the development and growth of the product from 0 to 1. I worked with the existing stakeholders who were operating through the existing physical channel to expand the product vision from a broken and scattered funnel to providing a complete end-to-end product. I managed the product as it passed through the various stages of vision, user interviews, strategy, design and initial MVP.

My responsibilities extended to

coordinating a diverse set of teams spanning Risk, Operations, Sales, Engineering and Design.
brainstorming on a logic to fund the client based on his/her confirmation for stocks bought on T, T-1 and T-2 days on a real-time basis.
analysing the product data and driving the growth of the product.

Product Details

The complete vision for the product is made up of three major aspects – buy stocks with an intent of requiring additional funds, confirming the funding with a verification, stop funding whenever required.

The buying aspect was integrated seamlessly on the existing order page of the trading platforms.

Confirmation of funding with a client specific verification (OTP) was brought-in on the trading platforms itself which utilised a mechanism provided by third-party market participants (stock depository). This aspect earlier had a waiting period of maximum 2 working days in earlier stages which got replaced by a new mechanism which had an almost real-time confirmation in the later versions.

Requests for repaying the funding and know the interest charges incurred till date which earlier happened in an offline mode was now made possible on the trading platform itself which enabled more clients to trust and use the product. Excess funds parked in their trading account could be shifted to the BNPL account online (similar to how a loan repayment is done through instalments)

Evolution of Product

When examining the revenue and the clients’ behaviour based on existing data of MTF segment, it was understood that the usage is very minimal. On further probing with initial user surveys and funnel analysis the root cause of the minimal usage was identified

a need to explain to clients that such a product is available and
streamlining the existing broken flow

We initiated user interviews to solve the first step. Research showed that a financial product will be used by a client if they see any potential of improving their returns. We concluded that the ‘hook’ to make clients understand the MTF concept was through the trending BNPL concept which can educate them that buying with lesser margins (or on leverage) can increase their returns percentage.

Getting to the ‘hook’ of the concept allowed us to think through all aspects of the product. We were able to grow the original idea of educating the clients about MTF segment into a fully blown idea of managing their funding that was capable of having regular engagement.

We started to create mock-ups to let users know on what scrips this product is enabled. We targeted the pre-trade pages on the trading platforms for this; Market Watch, Scrip Details and a separate BNPL product page. We added a new product, BNPL (along with existing Delivery and Intraday products), on the order page which helped the platform understand if the client is actually asking for any funding requirement.

We restructured the Funds view on the trading platform to drill down the trading account balance and BNPL account balance. This system enabled us to let clients know which stocks are being funded, which stocks need a funding confirmation, what is the status of earlier funding as well as repayment requests and the interest being charged.

Post the launch of MPV, we saw a great increase of our BNPL product metrics.

250% increase in the active BNPL clients
200% increase in funding book

However, launching the MPV had its own set of hiccups.

With the assumption of ours that many clients will prefer to use this product, we had made BNPL product selection as default on the order page. After tracking the order flow funnel and reviews from clients on various channels, we had to bring back Delivery product selection as default on order page.

Two working days waiting period was also a long stretch for clients to know their funding confirmation. This also led to a behaviour where clients confirmed their funding (also called as pledging through OTP) on the last day (sometimes even missing the deadline) since even the pledging allowed duration was dependant on the waiting period (settlement date as per industry wording). In order to circumvent this, we had to shift from a File Upload mechanism to API mechanism. Post the successful response of API, client will no longer be shown a CTA to complete the confirmation stage. The shift to API mechanism needed building 2 separate libraries to track the BNPL orders and their confirmation status, reconciliation after trading hours (to check if any sell orders were placed during trading hours), enforcing a logic on what scrips need to be sent in the payload of the API.

This effort positively impacted with 80% of clients pledging on the same day the stocks were bought.

Key Takeaways

As a product from early in my Product Management career, it taught me the importance of understanding defining the scope of the product.

This process taught me how to balance the creation of a complete "perfect world" product while understanding what features are required for a successful MVP.

Strengthened my understanding of UX, ability to gather & analyse heavy data from various sources, build & implement logics behind APIs.

How to best manage and communicate about the product to both internal and external stakeholders.

How post launch of MPV too, there might be few assumptions which can turn out to be faulty and recovering from those assumptions.

P.S. Here is the mobile app product sample

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