The Nairobi Securities Exchange (NSE) has transformed its trading system from an open outcry system to an online platform in 2006. Technology adoption has benefited local and regional economies, as the NSE is considered the gateway to other stock and securities exchanges in East Africa. The future of the NSE will see digitalization and increased investor
A few decades ago, trading stocks at the Nairobi Securities Exchange was like making plans to meet for coffee. There was no physical trading floor.
This then moved to an open outcry system. This involves shouting and the use of hand signals to transfer information, primarily about buy and sell orders.
While this worked well enough, the exchange still had more to do, and the leadership at the Nairobi Securities Exchange knew that with technology, the possibilities were endless.
“We started a very transformative journey in 2004, 2006 where we’ve been on a technology environment where we are now able to buy and sell online. We also had the brokers develop an app where clients can trade from. So technology has been a key enabler in our strategy,” said Geoffrey Odundo, the Chief Executive Officer at the NSE.
The NSE app is designed to provide market participants with convenient, faster and real-time access to the Exchange’s activities.
It features market snapshots, stock prices, market analytics, and financial news and is a gateway to stockbroker apps.
To further unlock more investment opportunities for investors using convenient and innovative solutions, the NSE has partnered with Safaricom to enable Kenyans to invest in stocks using their accrued bonga points.
To invest, Safaricom customers redeem their points at a rate of KES 1 for every 5 points via the ‘Lipa Na Bonga’ menu on USSD *126# or MySafaricom App.
Customers then key in the Trading Participant’s paybill number followed by their CDSC (Central Depository and Settlement Corporation) account number.
The adoption of technology at the NSE has been a major plus for the local and regional economies as the Kenyan entity is considered the gateway to other stock and securities exchanges in East Africa.
According to the International Securities Exchange (ISE), the founding principle of the application of technology in securities trading is the fact that technology fosters and infuses new efficiencies and operational innovations in securities trading.
With the many possibilities from technology and the emergence of artificial intelligence, a few years from now, investors could use voice commands to trade in the capital markets.
For Odundo, digitalization is key for the NSE. “We’re sure that that’s where we’re going to position the market in the future,” said Odundo.
While Kenya’s capital markets have seen a fair share of innovation and technology-driven products, the future has a lot in store that will not only make trading easier but also empower investors with more information and domain knowledge while making markets more secure.
Watch the video below for more on the NSE’s journey in tech.
