The new entrant, Sundaram BNP Paribas Fund Services has a tough task of making inroads in the mutual fund R&T business. Shridhar Iyer, CEO says that his company will offer the right mix of technology and customer service to carve a niche for its services.
You started your R&T business in 2010. Can you take us through the progress made so far?
We signed up our first customer in May 2010. We completed the migration of all the schemes from the two existing registrars by June 2011. Since then, we have handled over 72 new offers (including FMP’s).
We have demonstrated to the market our migration capabilities by successfully migrating records from both the existing RTAs. In terms of scale, today we service a very large retail portfolio having over 2.4 million investors spread across over 140 cities. We migrated successfully about four crore transaction records, more than 2.4 million of investor records and more than 35000 distributor records and history including brokerages paid/accrued. On a monthly basis, we handle about three lakh transactions, close to 30000 customer and distributor calls a month and about 350 emails a day from investors and distributors.
Today, in addition to core RTA services we provide fund accounting solutions, white labeled services for call centre and full suite customer service modules. We also provide and manage white labeled web portal for servicing distributors and investors.
The MF R&T market is currently dominated by two large entrenched players. How do you expect to compete with them?
In our view, the market is large enough to accommodate three to four players. We have less than 8% of households in India having a mutual fund product. This market will grow and we are committed to this market. When we started this venture a lot of people looked at us with skepticism. Today, there is no doubt in minds of AMC, customers, distributors that we mean business. We have made the right investments in technology and processes to deliver a better customer service proposition than what the market has seen. Today, when we see the number of appreciation letters/calls from investors, it gives us the confidence that we are on the right track.
We have a strong parentage that ensures that we stay focused on our quality and customer centricity. This allows us to make commitments in the market place in terms of investments besides giving us tremendous exposure to risk management techniques and global best practices in running our operations. Our technology allows us to be flexible to respond to any regulatory changes positively and we can ensure that our clients will be the first off the block in terms of regulatory compliance.
Most importantly, we actively engage ourselves within the industry, the distributor network, the software providers to the industry and we work with them in tandem recognizing the fact that we need to support each other, if we have to broad base the market and satisfy the end customer.
With not many new players coming in to the MF business, how do you propose to get the existing clients to switch to a new R & T player?
Yes, we have seen that in the last few years, people who have applied for licenses have gone slow or taking more time to evaluate the right entry strategy.
The biggest barrier that we are seeing currently amongst AMC to switch is the fear of migration. Some of them have the scars of the past or think that migration is people intensive. Another unfounded fear is that it takes long time.
We have a well-defined methodology that includes project planning, transition planning, execution, parallel run and steady state. All these stages involve multiple work stream and checks that ensure that the activity is checked for completeness and accuracy at every stage of data movement. We allow AMCs or their auditors to be part of the process and give them full access to the data and migration methodologies. We usually need one or at most two resources as a point of contact during migration to authorize/approve any decisions that we take during the migration stage.
As a part of the migration process, we conduct distributor engagement sessions across different cities, where we go to the distributor offices, especially those who are not yet empanelled with us as yet and help them to deal with the change and address any queries that they may have.
This is the first part of the interview.
