In this second part of the interview, Shridhar Iyer, CEO, Sundaram BNP Paribas Fund Services talks about his company’s plans and their differentiating factor.
There were nearly eight RTAs long back. Currently there are only two big players in the industry. Is R&T business too capital intensive?
Yes, it is capital intensive. But more importantly it is important to recognize that we cannot cut and paste global models to make it work in India. We have to learn best practices and learn adaptation of technology from global players in this business but tweak to manage local conditions in a manner local customers want and are willing to pay. Some of the players who quit the industry did not recognize this; others did not have a strong distribution network to support asset managers.
But it is important to say that less players in the industry means less competition and hence less opportunity for innovation or bringing down the cost of operations which ultimately will hit the industry’s abilities to compete with other financial products. It also exposes the industry to the underlying systemic risks.
How do you differentiate yourself from the existing players?
Technology, domain expertise and pricing are ticket to enter the race. They do not guarantee that we can win the race. The shareholders have been very clear that the differentiator will happen only through a superior customer service proposition and transparency in what we do.
We are the only RTA who regularly visits distributor offices and take their feedback. We ensure that the entire ecosystem is engaged simultaneously to make the end experience easier and satisfying.
Today, we are able to track customers, their engagements with us and areas where they would like to see improvements. We use this data along with the AMC to work on the servicing proposition. We track couriers that deliver the last mile ensuring that redemption cheques /warrants reach investors within the shortest possible time.
We negotiate with vendors to bring down the reimbursable expenses for the AMC and share issues openly and transparently with detailed root cause analysis.
Our investments in high end call center helps us to track and monitor our response quality and our engagement with the customers on a real time basis. We monitor our first time resolutions, average time to service and we also send our representatives in case any senior citizen needs help with their servicing needs.
In addition to online portal, mail backs etc. we have been also able to process brokerage within 7 days of the next month for our AMCs.
For AMCs, we ensure that they are first off the block in case of any regulatory changes. We work with them on automation of processes, interact with the depositories and stock exchanges to help in listing of funds and ensure that payment solutions providers are aligned in terms of servicing requirements and host of other things like data cleanup for ensuring better responsiveness.
Besides providing R&T services to AMCs, are you also into fund accounting and other such services (KRA, etc.)?
Yes. We have a strong fund accounting team with a strong domain expertise and over 50 years of collective experience in this space. We are investing more into this area in terms of process automation and our proposition to the open market is ready.
Besides AMCs, are you looking to get clients from insurance and other segments of the markets?
At the moment we are focused on the asset management business. In the insurance segment we would be keen to look at the fund accounting services, however there are regulatory restrictions on the same currently.
How do you secure client data?
We have our ISO 27001 certification for both our own centers and our call centre and fund accounting operations. This ensures that the concept of securing data in ingrained in our working philosophy in terms of the way we hire, manage and control our activities. This certification requires us to implement a long list of controls and we are audited every year to ensure that we maintain and improve our standards each year.
How many branch offices do you have currently and how many are you planning to open? Are you looking at beyond top 15 cities because that’s the focus area for AMCs now?
We cover 99.9% of the asset sourced by our customers through 141 offices. We can increase this network based on any new requirement within 60 days of such requirement.
New fund offers and transactions have come down. How do R&Ts remain profitable in such a scenario?
Industry has to grow. If the asset managers themselves are under pressure it is but expected that there will be pressure on all dependent services. We have to sail through the tough times, but we are committed to be here for the long haul.
This is the second and concluding part of the interview.
