The mutual fund industry which caters to over two crore investors has grown five times in the last decade from Rs 5 lakh crore to Rs 27 lakh crore. The growth has been steadfast, especially post demonetization.
Here are some key recommendations put forth by experts at the CII Mutual Fund Summit 2020 to propel the industry further:
Focus on household savings for long term wealth creation
This can be achieved by rethinking a fundamental shift in the product proposition. Enhancing investor awareness across all categories of products and simplification of on-boarding processes will be key to target such households.
The need of investing in ‘new age customers’
Multiple large customer segments with different needs and preferences are expected to emerge over the next decade. The increasing prominence of digital-savvy millennial, the growing influence of women and the rising elderly population are all examples of ‘newer’ emerging customer segments. The asset management companies will need to rethink the product proposition and go-to-market strategy for these segments given their varying needs and preferences.
Acceleration in distribution outreach
A high touch model will continue to be relevant, especially in B15 cities as first time investors enter the asset management industry. Expanding the network of Independent Financial Advisers, Registered Investment Advisers, better utilization of the banking channel and increasing the utilization of online presence will be key to reach such customers.
Enhancing customer experience
Despite achieving scale and growth, the asset management industry continues to lag in delivering superior customer experience. Complete re-imagination of the customer experience will be required to on-board new customers and engage with existing customers. Investing in mutual fund platforms with simpler “user Interface simplification of the KYC process and automation of the back-end will be vital to deliver on these aspects.
Use of technology across the value chain
Technology can enable asset management companies to target and reach out to a large number of investors with lower costs and improved efficiency to deliver enhanced customer experience without compromising on quality.
Understanding the importance of self-governance
Focus on self-governance will be important as the industry scales up. New age technologies such as data analytics and artificial intelligence can be increasingly leveraged to improve self-governance.