MF sector's next growth phase will be powered by digital solutions: N K Prasad
2016 has been a good year for India's mutual fund sector, reaching an asset size of Rs 13 trillion and seeing a strong return of retail (small) investors. N K Prasad, president and chief executive officer at Computer Age Management Services (CAMS), a prominent transfer agency in the sector, talks about this and his entity's outlook to Chandan Kishore Kant. Edited excerpts:
How has 2016 been for MFs?
The sector experienced continued growth, with significant inflow from existing and new investors.
Assets under management (AUM) touched an all-time high of Rs 13 lakh crore. Growing investor interest is evident in the form of growth in active accounts and increased systematic investment registrations.
What have you done on the rising opportunity for providing a smooth experience for investors and distributors?
With AMCs (asset management companies) and distributors focused on promoting the awareness about MFs, we are seeing increased contribution from smaller cities and towns, termed B-15 (beyond the top 15 cities) in the past two years. They are contributing nearly 50 per cent of the new folios (accounts).
CAMS have been supporting this expansion with a number of technology solutions, including 'anytime, anywhere MF solutions' like mobile apps, tablet solutions, supporting bank wealth management platforms, distribution platforms, stock exchanges, call centres and SMS services. Plus, nearly 50 new service centres. CAMS continues to invest in these as the new market opportunities grow.
We have also expanded our call centre services to five locations. This extensively supports regional language requirements. Migrating investors to use electronic payouts has been a significant activity. We offer integrated solutions for SIP registration and debit mandate processing, significantly reducing the cycle time. The recent FATCA (US investor accounts disclosure treaty) and supplementary KYC (Know Your Customer) compliance was first launched as an online facility by CAMS to make it a convenient process.
How is CAMS leveraging on use of the digital medium?
We see the next growth phase of the sector to be powered by digital solutions. In 2014, we launched a suite of digital solutions, 'Anytime, Anywhere MFs' for 2G and 3G-enabled devices. This included tablet-based CRM solutions, a CAMS Slate for MF sales persons, a myCAMS mobile app, micro site for individual investors and a GoCORP online platform for institutional investors. We have obtained a licence to use the Aadhaar database to facilitate e-KYC and will soon enable paperless on-boarding of first-time investors from anywhere in the country. Distributors will soon have an app to grow and manage their business efficiently.
What's the current average size of systematic investment plans (SIPs)?
The SIP book has been a significant growth engine. CAMS' serviced funds' SIP book has seen a staggering 40 per cent growth from last November, from 3.86 million to 5.42 mn SIP accounts. The average size has also improved to a little over Rs 3,000 from about Rs 2,800 a year before. The cease rate that usually increases with market volatility is less, pointing to confidence on staying invested.
In Chennai's floods, several of the back-end operations could not operate. How did you service clients?
We had some experience from a decade earlier, during the tsunami and subsequent floods. Given the nature of our operations, we invested heavily in building resilience into our technology infrastructure and operating models for transaction receipts and processing. The test you refer to brought out an altogether different dimension of our employees’ client focus and commitment. Our technology platform, resources and business continuity practices withstood the test. All MF transactions were processed during this period, redemption payouts made and our AMC clients could declare net asset values as a normal activity.
What challenges do you see in the current environment?
Investor education and awareness is a big opportunity. To supplement what is being spent by AMCs, we have evolved digital media communications to create awareness among those who are potential investors of tomorrow.
Another inclusive growth opportunity of serving retail investments from the hinterland could be achieved by leveraging technology via mobile apps, payment gateways & one-time mandates.
How has 2016 been for MFs?
The sector experienced continued growth, with significant inflow from existing and new investors.
Assets under management (AUM) touched an all-time high of Rs 13 lakh crore. Growing investor interest is evident in the form of growth in active accounts and increased systematic investment registrations.
What have you done on the rising opportunity for providing a smooth experience for investors and distributors?
With AMCs (asset management companies) and distributors focused on promoting the awareness about MFs, we are seeing increased contribution from smaller cities and towns, termed B-15 (beyond the top 15 cities) in the past two years. They are contributing nearly 50 per cent of the new folios (accounts).
CAMS have been supporting this expansion with a number of technology solutions, including 'anytime, anywhere MF solutions' like mobile apps, tablet solutions, supporting bank wealth management platforms, distribution platforms, stock exchanges, call centres and SMS services. Plus, nearly 50 new service centres. CAMS continues to invest in these as the new market opportunities grow.
We have also expanded our call centre services to five locations. This extensively supports regional language requirements. Migrating investors to use electronic payouts has been a significant activity. We offer integrated solutions for SIP registration and debit mandate processing, significantly reducing the cycle time. The recent FATCA (US investor accounts disclosure treaty) and supplementary KYC (Know Your Customer) compliance was first launched as an online facility by CAMS to make it a convenient process.
How is CAMS leveraging on use of the digital medium?
We see the next growth phase of the sector to be powered by digital solutions. In 2014, we launched a suite of digital solutions, 'Anytime, Anywhere MFs' for 2G and 3G-enabled devices. This included tablet-based CRM solutions, a CAMS Slate for MF sales persons, a myCAMS mobile app, micro site for individual investors and a GoCORP online platform for institutional investors. We have obtained a licence to use the Aadhaar database to facilitate e-KYC and will soon enable paperless on-boarding of first-time investors from anywhere in the country. Distributors will soon have an app to grow and manage their business efficiently.
What's the current average size of systematic investment plans (SIPs)?
The SIP book has been a significant growth engine. CAMS' serviced funds' SIP book has seen a staggering 40 per cent growth from last November, from 3.86 million to 5.42 mn SIP accounts. The average size has also improved to a little over Rs 3,000 from about Rs 2,800 a year before. The cease rate that usually increases with market volatility is less, pointing to confidence on staying invested.
In Chennai's floods, several of the back-end operations could not operate. How did you service clients?
We had some experience from a decade earlier, during the tsunami and subsequent floods. Given the nature of our operations, we invested heavily in building resilience into our technology infrastructure and operating models for transaction receipts and processing. The test you refer to brought out an altogether different dimension of our employees’ client focus and commitment. Our technology platform, resources and business continuity practices withstood the test. All MF transactions were processed during this period, redemption payouts made and our AMC clients could declare net asset values as a normal activity.
What challenges do you see in the current environment?
Investor education and awareness is a big opportunity. To supplement what is being spent by AMCs, we have evolved digital media communications to create awareness among those who are potential investors of tomorrow.
Another inclusive growth opportunity of serving retail investments from the hinterland could be achieved by leveraging technology via mobile apps, payment gateways & one-time mandates.
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