Shridhar Iyer, Chief Executive Officer, Sundaram BNP Paribas Fund Services in an interview with Cafemutual talks about how his R&T is trying to innovate to stay competitive in the R&T business.
What new initiatives have you taken in the recent past?
We are the only registrar and transfer agent (RTA) in India to bag an International Standards for Assurance Engagements (ISAE) Type II certification. This certification reassures our customers and potential customers on the soundness of our operating model, the design and the effectiveness of the controls implemented.
The industry has not been able to pay brokerage on time for a very long time now due to various reasons. However, we are processing brokerage in less than T+5 days, on an average.
A dividend processing for, say an equity scheme, used to take five to ten days; however, we are paying in T+1/2 basis, a new standard..
The bank reconciliation services that we provide to our customers have taken out a lot of anxiety from the banking teams of our customers. The sheer retail nature and the volume of the business make it very complicated in reality. Today, we have the ability to provide end-to-end support and timely completion of bank reconciliation, thanks to the automation that we have carried out at our end.
We make a measurable difference in terms of customer experience and we save costs. Saving cost happens at multiple levels. With a simple exercise of de-duping the database, we have reduced their reimbursable cost by 15% to 20%.
How is your customer service different from existing R&Ts?
We actively measure customer experience, on which we present a report to the client every month. The feedback that we provide to the AMCs has helped them to drastically cut their decision making time and implement change. This helps create stickiness of assets for the AMC. At this time when schemes are not performing well and the market is witnessing an exodus of investors, the key ingredient in the AMC’s marketing/sales plan should be to go closer to the customer and engage with them better. It would be easy to do this if the AMC is glued to the customer’s experience.
Are your branches equipped to handle if direct investors grow?
We readily welcome all direct investors to our branch at all times. It’s a good model to have where customers walk into your branch to discuss any issues they may have. You can get direct customer feedback and that helps both the RTA as well as the AMC to meet the changing expectations of investors.
Will the cost for servicing direct investors go up?
No, for us as a RTA, at current volumes, there will be no difference. Our branches are equipped to handle direct customers. Currently, we are already servicing direct walk-in customers as well as distributors through our branches.
What initiatives have you taken for enhancing distributor experience?
When we launched our services, many distributors were pleasantly surprised when our teams went and met them at their offices. We continue with that trend. We conduct periodic feedback surveys with key independent financial advisers (IFAs) and national distributors on how we are meeting their expectations. Our call centre provides the distributors a mode to express themselves through our IVR feedback.
Our new design of brokerage statements for distributors, have cut down broker queries at our end by about 60%. We have provided most of the important information the broker expects to have in the summary as well as the detailed statement. This helps them to do the back end reconciliation in an effortless manner.
We have suggested that AMC’s should look at incentivizing good distributors who get fewer complaints from investors. 80-85% of our market is still distributor driven. If you incentivize those distributors who get fewer complaints then it will be big boost to the industry. Satisfied customers are the key for the long term development of this business.
Most fund houses are not keen to migrate to a new R&T. How do you tackle this situation?
AMCs see migration as a risk. We understand that. Migration is a function of expertise and is a process driven activity. We have demonstrated it twice when we migrated Sundaram Mutual and BNP Paribas Funds. The risk in migration has come down drastically for any prospective AMC because we are in a business as usual mode. The brand has been established. Distributors and investors who walk into our branches are happy with our services. Distributors again are common for all AMCs. We are already servicing them effectively. Last year, we processed close to 3.8 million transactions. We handle about 25,000 customer interactions in a month.
Can investors transact during this transition period?
Yes, they can transact as the migration happens at the back end. The cut-off happens over the weekend. We have a well-documented change management and communication protocol during migration.
Apart from mutual funds do you also plan to onboard insurance companies?
Currently, we are focused on providing fund accounting and TA services to the asset management industry. We have also launched an Alternate Investment Fund servicing platform to support servicing of AIF investors.
How do you protect your database?
There are multiple ways of protecting data. We have physical and web security. Accessibility to workspace and computer network is restricted. We are also an ISO 27001 and ISO 9000 certified company. Our systems have well defined controls. There are web cameras and biometric identification is required to get accessibility into key operating areas. There are certain protocols for change management. We have multiple layers of investor data protection.
When do you plan to break even?
We are still in the investment phase. Our priority at this moment is to make sure that our proposition is well understood by the market. People who appreciate quality will last longer because customers are getting more demanding. Service providers have to up their game. Our two shareholders i.e. Sundaram Finance and BNP Paribas Securities Services are fully committed to this market.
How will MF Utility impact your business?
MF Utility is an order routing software. The objective of MF Utility is to reach out to more investors.
It’s a good initiative but platforms have not picked up yet. For MF Utility to succeed, it needs to increase its awareness, accessibility and affordability. It should be able to adapt to the changing rules of the market. Offering it free of cost to distributors and investors can be a challenge. It may impact our business in some way but it is unlikely at the moment. MF Utility will depend on the branch network of R&Ts.
If you look at the other side of the coin, we will grow if markets grow. It’s going to be a challenge if the industry has to fight for a smaller pie. Growing the market should be the number one priority for all stakeholders in this industry.
