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BW Businessworld

"The Problems That The Industry Is Facing Are Driving Disruption"

A panel comprising of Aditi Kothari of DSP BlackRock, Sadique Neelgund of Network FP and S. Kannan of the event's Tech Partner MF Utilities got together with moderator Dr. Mohit Batra of MarketsMojo, to discuss the role of technology in the MF distribution ecosystem in the times to come

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Technology is quickly becoming a ubiquitous aspect of every part of the Mutual Fund distribution ecosystem. From Aadhar based e-KYC to proprietary apps being launched by AMC's, it's quite clear the there's a big push currently taking place to leverage technology and propel the industry into its next phase of growth.

To conclude the action packed Businessworld Mutual Fund India Summit 2016 held earlier this month at Mumbai, a panel comprising of Aditi Kothari of DSP BlackRock, Sadique Neelgund of Network FP and S. Kannan of the event's Tech Partner MF Utilities got together with moderator Dr. Mohit Batra of MarketsMojo, to discuss the role of technology in the MF distribution ecosystem in the times to come.

Dr. Batra kicked off the discussion by outlining the various types of emerging technologies prevalent today, and raising the question on whether or not these technologies are really 'disruptive' any longer, or really 'essential' in nature.

"It is not the technology that is disruptive; rather it is the problems that the industry is facing that is driving the disruption", said Kannan of MF Utilities. "Technology is an enabler", he said.

Kannan also pointed out that there is a one is to eight mapping between unique clients and unique folios, therefore leaving a lot of room for the acquisition of new clients.

"Today is the era of the customer, and the customer is spoilt for choice", said Kothari of DSP BlackRock. She pointed out that the customer (in this case the IFA) will choose the platform that is technologically the best, fastest, easiest to use, involves the fewest clicks, and enables him in terms of serving as a 'one stop shop'.

Kothari's view was that creating such a high tech platform is no easy task, but the platform that will be able to do all of the above stated well is the one that will win in the long run. She also pointed out that there could potentially be more than one 'winner' in this regard, and that the availability of capital would play a critical role in the development of such a wining platform.

"The people developing and running these platforms need to be in their twenties, as they will be catering to the next generation", observed Kothari, interestingly.

Neelgund of NetworkFP put forth his view on Robo advisory, which has become quite a buzzword nowadays. "I want to introduce another term called Bionic Advisors", he said. "A Bionic Advisor is one who is essentially a human advisor, who is making the best use of technology".

Neelgund expounded that a bionic advisor is one who makes great use of five kinds of technology, namely: Transaction Platforms, Financial Planning Software, CRM Tools, Portfolio Reporting Software and Productivity Tools (such as daily task management apps).

"Two thirds of an Advisor's time must go into interacting with clients", he rightly said. He stated his belief that an Advisor would really be wasting his or her time if they are engaging themselves in documentation related work, for instance. Neelgund also pointed out that a Bionic Advisor can use technology to acquire and manage client relationships outside their immediate geographies, stating Jaipur based Hemant Beniwal and Delhi based FinEdge Advisory as examples of the same.

Next up, Batra called upon the panel to compare the benefits of AMC led programs such as IFAXpress, integrated technology programs such as MFU, and exchange led programs such as BSE Star.

"Ease of transaction processing is the main value add provided by integrated platforms such as MFU", said Kannan. He also mentioned that platforms such as MFU also bring in a lot of benefits in the 'physical' realm; reducing the need to carry stacks of forms to client meetings, for instance.

"We want that the IFA's should be able to go to one place and buy everything that they want", said Kothari of DSP BlackRock. "At the end of the day, our philosophy is that we want to contribute to the paperless part of transactions as much as we can, by building habits"

Kothari expressed similar beliefs to Neelgund, stating that Advisors need to spend maximum time advising clients and not running around for paperwork. She made an appeal to IFA's to start trying to change their habits when it came to their continued preference for physical documentation, as this would benefit the ecosystem as a whole.

In conclusion, the esteemed panel took a few interesting questions from the IFA's present in the audience.