To Sreekanth: Since your background is in IT sector, what are the key changes you have made in KFintech that you have learned from your IT days?
I am fortunate to have a techno functional background in financial services industry in India and abroad. The experience of working with several cutting edge tech and financial services organizations has provided several valuable insights
First off, it’s the willingness to listen to the stakeholders (in MF - investors, MFDs, AMCs, Regulators & industry participants) and address their business KPIs. Technology is the foremost of the enablers and should be leveraged to the hilt. For example, it is through carefully securing feedback from MFDs and calibrating our responses to their most pressing needs that we embarked on the journey of deploying big data architecture to ensure near real time processing of brokerages
My experience has taught me to focus on ways to improve end business outcomes rather than implementing tech for the sake of tech.
To Sreekanth: You have been in this industry for four years now. How has been the journey so far and what are your key learnings?
The journey at KFin and in Indian MF industry, had been, amongst the most enriching experiences I have had in my career. Amongst others learnings, it is the realization that there’s no standard work template even if an individual has relevant experience & expertise. What works in a country does not work in another and what works in payments may not work in lending or investing. So it is truly about shedding the baggage, reinventing and applying the best of technology, processes and people have to offer to deliver to unchartered business outcomes.
The frugality of Indian economics constantly propels innovation that delivers best in class outcomes at some of the cheapest price points on th earth. UPI is a phenomenal example and path breaker in that sense. In a short span of 5 years, India became the nation with the highest number of digital payments leapfrogging China, US and the rest of the world.
Second is the imminent need to think ahead, innovate and create solutions that the stakeholders may not even realize they need. Innovation is truly at its best when it solves for problems that don’t exist today but could fructify tomorrow should the innovation not been implemented.
Lastly, implement, in spirit, the intent of all applicable regulations and contribute to the effective governance of the industry.
To Sreekanth and Sathish: How do you see the role of RTA evolving in the coming years?
Sreekanth: Registrars had been the MF industry’s backbone for front, middle and back office operations. Not being a vendor but being a partner is truly where the Registrars have got it right. One of the immediate manifestation is that the Registrars have been both directly and indirectly contributing to the growth of the AMCs. We have the intent, skills and capabilities to create platforms and solutions for investors, AMCs and intermediaries. The recent launch of MFCentral is a good testimonial and hopefully will be first of many such to be launched.
Innovation and rapid execution is of critical essence in times to come. Our role will no longer be limited to creating solutions that industry demands of us but in creating innovative features that many wouldn’t even have thought of. Rapid prototyping and hyper fast go to market solutions will differentiate the leaders from the followers.
Sathish: Deploying big data on cloud to make operations more scalable and quick whilst providing deep insights beyond post mortem analytics is a key area of focus. This will facilitate AMCs to devise best of the schemes, MFDs the necessary tools to optimize their efforts, investors their return and regulators a clean and transparent industry.
Second is the integration between all financial services providers be it RTAs, banks or AMCs through the use of APIs. This will weed out a lot of inefficiency in the system and improve customer engagement with faster turn around times and more accurate processing.
To Sreekanth: What are the services that you offer to MFDs?
MFDs are truly the back bone of the MF industry and someone whom we endear ourselves to. The MFD community’s contribution to MF industry is unrivalled by that of any other intermediary in BFSI industry. As mentioned above, we have made a significant pivot over the years to create several industry first solutions for MFDs.
At the core of it is rendering, undisrupted services such as transaction processing, computation of brokerages, statementing, compliance amongst others.
We have created the country’s first Distributor Initiated Transaction platform in both mobile and web which is extensively used by the MFDs. We are also the fastest when it comes to delivering commission payout calculations to AMCs. Our T+3 (T = month end batch close) model enables all associated AMCs make commission payouts by the fourth of every month.
With the deployment of our big data platform, MFDs would soon be able to access their commission statements real time. With integrations with the eco system, we are working towards creation of platforms and alliances to extend a line of credit to MFDs based on commissions earned. Further, we are working with the industry to expand the ambit of MFCentral itself to provide all services to distributors making it a one stop shop for all things MF.
To Sreekanth: What features should MFDs expect on MFCentral?
At the minimum, everything that’s already out there on any of the intermediary platforms. OVertime, the platform will allow MFDs to access aggregated brokerage statement maybe even aggregated commission payout. The solutions and services will also be available for sub-ARN holders.
A lot of services will get faster because the platform accesses data at the point of origin. The platform will spawn a new generation of analytics and insights as well which will help MFDs and AMCs service their customers better.
We will engage with MFDs to know what they want us to provide for rather than pre-supposing what they might need. It will help us reduce iterations to reach end outcomes.
To Sathish: What new services MFDs should expect from KFintech?
In the next 6-9 months, we plan to take the tech that we have built for AMCs to the MFDs.
MFCentral is another avenue we are working on. The platform will soon help MFDs execute transactions. They will also be able to provide integrated reports to their clients.
To summarise, we want to cut down the layers MFDs have to deal with, partake in their journey of optimizing their costs and efforts (through digital platforms and education) and help them grow their market.
To Sreekanth: One of the major concerns of MFD is that they find it difficult to resolve issues with RTAs – (MFDs say that RTAs give standard response to their queries). How can you fill this gap?
Listening to our stakeholders is the first step to improve. Its an ongoing activity and a constant endeavor to improve services to the ever demanding clientele. We have created a dedicated CRM solution for MFDs and are rolling out dedicated hotline for all things MFD. What cant be measured cant be controlled. We have created metrics to track our engagement – FPR (First Pass Resolution) and TAT (over 95% same day) amongst others. We have seen remarkable engagement with MFDs in the past year and we are confident of ensuring the MFD community be the best served intermediary community in BFSI sector.
We are working on creating a ‘pod’ structure to provide regional support even as our digital application is getting multi lingual (like KFinkart Investor).
To Sreekanth: MFDs have been demanding a centralised platform for all their transactions like empanelment and nomination. Is there a plan to introduce these features in MF Central?
If there has to be a centralised platform then the best place would be MFCentral. MFCentral is a true manifestation of the entire industry coming together. Everyone has worked together to shape it and there’s a lot of work ongoing to incorporate solutions to elevate the experience of MFDs.
To Sreekanth and Sathish: What new features should investors expect in MFCentral in times to come?
Srikanth: If delivered to the potential, it could become the first super app for financial services in our country. There won’t be anything that you will not be able to do. Since the platform deals with data at the point of origin, the costs and risks come down.
The coming together of the entire ecosystem has kept me personally interested and invested in it.
I really hope we can bring features as advanced as those available in countries like China, where mutual funds have near real-time liquidity rendering payments be made through MF units.
Sathish: For long, investors had a perception that RTAs and MFDs serve them properly only when in case of commercial transactions. We have plugged that gap with MFCentral. They can now go to the platform for services such as change in nominee details, phone number and bank account.
The platform will soon be available in the form of an app.
Also, we are going to expand its ambit to serve NRI customers.
