As an R & T with head office & substantial operations in Chennai, what was the impact of the recent heavy rains on your operations?
The city was impacted on many fronts. Public transport almost came to a standstill for a few days. Chennai airport was shut. Train services were terminated or delayed. Power supply failed in many parts of the city for several days. CAMS had power outage for 5 days and ran on diesel generator. Local banks including clearance, ATM services and branch operations were impacted for a few days. Payment gateway had disruptions. Almost all telecom & connectivity service providers had disrupted services. The postal and courier services had discontinued their operations in totality. This will give you an idea of the enormity of the impact.
CAMS operations are both people and technology intensive. Hence, CAMS has well-developed business continuity practices (BCP) and some experiences from a decade back during the tsunami and subsequent floods. Given the critical nature of our operations, we invested heavily in building resilience into our technology infrastructure and operating model for transaction receipt and processing.
However, the inclement weather last week was a true test of our business continuity plan and brought out an altogether different dimension of our employees’ client focus and commitment to service delivery. We are happy to inform you that our technology platform, resources, business continuity practices withstood the test of the environmental disaster. Our committed employees braved the weather and several of them stayed away from families to provide business continuity and delivered all the critical deliverables. All MF transactions were processed during this period, redemption payouts made to investors and our AMC clients could declare NAVs as a normal business-as-usual activity.
Despite the breakdown in external services particularly telecom/data connectivity, CAMS ensured AMC branches, their websites, interfaces with wealth management platforms, pan India network of CAMS service centers continued to connect with CAMS back offices to provide uninterrupted services to investors. Distributors could continue transaction submission and investor services without any disruptions.
As you said, life in Chennai was severely impacted and most people were not able to venture out of their homes. Was the attendance at CAMS severely affected?
We had planned well for employees carrying out critical deliverables to attend office on all days. Logistics/near-by hotel accommodations were organized in advance. Our facilities management team ensured the premises and people were safe.
How did you ensure that your processes functioned smoothly?
Our committed employees, operating model with a network of front offices across the country and planned redundancy in technology and physical infrastructure enabled us to deliver on all critical services to our AMCs. Our front offices spread across the country ensured that all transactions were received from customers as usual and were processed within the regulatory timelines. We also ensured adequate stock of diesel that helped us through the entire period despite the power outage. In addition, redundancy built into technology infrastructure helped us to maintain uninterrupted services despite most of the internet links being down and the service providers having closed down completely in Tamil Nadu. We had our Coimbatore facility on a stand-by to take over critical operations in case of primary and secondary failures at Chennai but did not finally need to exercise that option.
As a leading service provider to the mutual funds industry and other financial services, what contingency/disaster recovery/continuity plan do you have? Did this come into play this time?
CAMS follows a very robust and tested BCP and disaster recovery plan (DRP). All the back offices, pan-India front offices of CAMS are connected to all the three data centers of CAMS in highly redundant network architecture. Our three data centers, two in Chennai and one in Coimbatore are equipped with state-of-the-art IT infrastructure with any one of three can be operated to support full production volumes on a standalone basis. We have a fully tested and well documented BCP-DR plan with a well-defined call tree mechanism and other related governance framework. As part of our Risk & Compliance Framework, we do full-blown BCP-DR drills at periodic frequencies. Any gaps identified are immediately addressed to get us into higher levels of maturity. We also allow our AMC clients to participate in our drills which give them immense confidence of our BCP-DR capabilities. Apart from this, we invite one of the Big ‘5’ to do a comprehensive Audit on our BCP-DR practices, benchmark ourselves to the best practices followed in the Industry. This gives us external view to test the efficacy of our BCP-DR architecture, processes and practices.
To what extent was the mf business (inflows/outflows) in Chennai and other affected parts of Tamil Nadu affected by the rains?
In Chennai, we saw a reduction of about 75% inflows/outflows during the 4 days from the normal levels.
Despite heavy rains, CAMS has been updating NAVs every day. Is this process technology driven or done manually?
As mentioned earlier, our operations are both people and technology intensive. As a technology enabled service partner, we offer platform based services. The technology platform, which has matured over the years to an Enterprise resource planning (ERP) like platform to deliver mutual fund related processes. However, functional expertise is brought by people. CAMS has invested behind building a resource pool of cross-functionally trained process experts for fungibilty. A combination of robust technology and commitment from people to meet client delivery helped CAMS serviced funds to deliver NAVs on all days.
SEBI chief U K Sinha has said that MFs should reduce the costs associated with mutual funds. If SEBI were to bring down the TER, do you see it affecting the revenues of your business?
CAMS focuses on technology based automation, process innovations and productivity improvements to manage cost pressure.
Given all R&Ts provide similar services, how do you differentiate yourself?
While the core R&T services are pretty much standardized, CAMS has built its value proposition as a service solutions partner rather than R&T with our clients’ growth embedded in our mission. We are aligned with our clients as business enabler, technology partner, knowledge partner and industry catalyst. We have many technology led innovations to our credit in investor and distributor services. For e.g. consolidated account statement across various mutual funds, an original innovation of CAMS in 2008 has now become a securities market practice.
What new initiatives is CAMS undertaking for distributors and investors?
In 2014, CAMS launched a suite of digital solutions “Anytime Anywhere Mutual Funds” for 2G/3G enabled devices. This included tablet based CRM solution CAMS slate for mutual fund sales persons, myCAMS mobile app for individual investors and GoCORP online platform for institutional investors.
myCAMS has been continually upgraded for new features to make mutual fund investing a hassle-free experience. Both these products, though for investors, are very distributor friendly. In fact, 65% of myCAMS registered users are intermediated investors. Our app for distributors will be launched in the next few weeks.