Zerodha: Nudging Users towards better choices

I have long been a fan of Zerodha the company. My fandom increased considerably when I saw this post by the founder, Nithin Kamath.

Those who know me know of my fascination with Digital Products that help us make better choices and build better habits. (This is one of my current side projects.). I had some free time this morning, and I decided to spend it thinking about how I would use nudges inside Zerodha. Below is what I came up with.

Caveat- I am neither a designer nor a sophisticated investor. The pictures below are just mock-ups- do not judge them for their design quality or investment advise!

1. Decision Journal

Farnam Street’s Shane Parrish talks about using a “decision journal”, i.e, writing down his thought process, emotional state, and expected outcome while making an important decision, and then reviewing it periodically and comparing it with actual outcomes. I tried to use the same process while dipping my toes into the investment world but found too much friction in the process.

However, what if this was bundled with the actual platform we use to make decisions? This is what this could look like (the content of the questions are purely for illustrative purposes):

The meta-data that one gathers from the journal can help nudge users into being less impulsive. Here is an example

Even though it’s not likely to be a feature adopted by the masses, it’s going to make the platform incredibly sticky for those who do use it. Further, the metadata that this yields some extremely useful insights for Zerodha.

2. A Pop-Up to cheer individuals up after a massive loss.

In June 2020, a young trader on Robinhood committed suicide after he saw a balance of negative $700,000 on his account. It was a sobering reminder to all startups that the people using your applications are not inputs to an algorithm, but real people with real hopes and fears.

I would imagine a portal like Zerodha is at the receiving end of many wild emotions- from ecstasy after making massive gains to despair after making a big loss.

Can Zerodha put a gentle hand on its user’s shoulder after a major loss? Here’s one way this could happen, and all it involves a pop-up with links to a few blog-posts.

3. Modifying Existing Nudges

Here are the existing nudges from Zerodha.

Could we use quotes or emojis to make these nudges more appealing?

4. Preventing Cognitive Biases

All our decisions are subject to cognitive biases, such as confirmation bias, loss aversion etc. It is vital to take these into account while making investments.

Again, as a platform, Zerodha is uniquely placed to warn its users about possible cognitive biases. Here’s an example below

This kind of nudge in particular is extremely tricky. Not only is it tricky to identify when and which cognitive biases are in play, but I’m presuming Zerodha would like to avoid any perception of being a Stock Advisory Service. Implementing this would require extensive user interviews along with a strong familiarity with the market itself.

Conclusion

Many technology companies are financially incentivized to nudge their users into taking actions that have negative consequences, and it is heartening to see Zerodha working on positive nudges. As India’s largest investment platform by far, these nudges can have an enormous impact on the financial and emotional well-being of millions of customers.