The Role Of Technology In Mutual Fund Industry

Srinivas Jain, Executive Director & Chief Marketing Officer, SBI | Monday, 22 April 2019, 10:18 IST

The Role Of Technology In Mutual Fund IndustryWhile the new age technologies can bring in disruptive growth, we have our focus on bringing in an all-inclusive growth not just for our investors, but also for our partners and their affiliates.

Just like other industries, mutual funds too have embraced technology and evolved considerably over the last few years. Initially, the focus on use of technology was to create a support system and ease the mode of doing business for investors and distribution partners. Over time, the asset management companies (AMCs) have made more constructive use of technology, by augmenting its focus on other features such as knowledge sharing, community building, customization and round-the-clock service mechanisms.

One of the most effective use of technology for any businesses has been to create a simple user journey – right from the point of ideating to decision making and finally execution. This is where we as a fund house have focused a lot and been innovative by offering goal-based solutions to our investors rather than simply mutual fund schemes. This apart, we have empowered our distribution partners and investors with self-help tools and applications for a better investment experience with us.

"Technology can be its own enemy in the form of malware attacks, cyber security and data threats"

In today’s world one can simply say that technology and businesses have become inseparable. In the words of Bill Gates, “Information Technology and business are becoming inextricably inter woven.

I don’t think anybody can talk meaning fully about one without the talking about the other.”

When it comes to investment management, human insights continue to be more important, but the use of tools based on machine-learning facilitates decision making for us investment managers. At times there are certain funds/investment decisions which are planned purely on data analysis.

Given the progressive environment, some of the latest technologies to be deployed by AMCs are Artificial Intelligence (AI) powered chat and voice bots. Next in line, are Application Program Interface (API) led digital product strategies where businesses create easy to use APIs for distribution partners to seamlessly integrate and selling mutual funds. This well help businesses scale quickly. It is a tried and tested model by a lot of businesses in other industries as well.

We at SBI Mutual Fund launched our virtual chat bot YUVA in 2017, which is available on our website and Facebook page. So far, YUVA has handled over 2 million queries and helped initiate thousands of transactions. Which means, not only our investors are getting feedback or answers to their queries, but also going a step ahead and helping them invest through the chat module. Off late, we have also introduced Voice Assistants, independently powered by Google and Alexa, respectively. These AI-powered bots are aimed to build efficiencies on the service front for investors and reduce dependency on our call centre.

We also have a platform called Investack, where we publish open APIs, which are created in a developer ecosystem that can be seamless integrated. This API led digital product strategy will allow us to scale quickly as our partners and other affiliates such as Registered Investment Advisors (RIAs) and Independent Financial Advisors (IFAs) can focus solely on client acquisition rather than spending time/cost on developing mutual fund operational capabilities. These APIs will take care of all the back-end processing, transactions and the operational process of mutual funds including payments. To know more about these APIs, visit Investack.

While the new age technologies can bring in disruptive growth, we have our focus firmly set on bringing in an all-inclusive growth. It is not just the AMCs, or its affiliates but also the investor who should benefit from the use of technology. These services are available round-the-clock and its now easier for the investors and distributors to automate mundane tasks and focus purely on productive work.

Technology can be its own enemy in the form of malware attacks, cyber security and data threats. Hence, at the end of the day it is of paramount importance that we mitigate risks to our digital assets by being proactive and deploying encryption and security measures, which can protect the data and assets, against such vulnerabilities.