Fund houses and distributors are increasingly using technology to expand their networks. Market experts said a number of players were keenly looking at low-cost methods to extend their reach after the Securities and Exchange Board of India banned charging of entry load on mutual fund investments.
For instance, Karvy Mutual Fund Services and E-Sin services India are planning to launch online platforms to enable buying and selling of mutual fund schemes online. This will be a web-hosted service offering complete data integration with asset management companies (AMCs) and registrars, enabling clients to buy and redeem units online.
According to sources, the cost of this facility will be borne by AMCs through trail commissions. Such online platforms are expected to make transactions simpler and cut costs.
Birla Sun Life Mutual Fund recently launched an internet-based systematic investment plan (i-sip), which enables investors to start SIP investments online.
At present, investors in schemes of Citibank, ING and Axis Bank can purchase, renew and cancel their SIPs online.
Anil Kumar, cheif executiver officer, Birla Sunlife Mutual Fund, said, “We launched this service recently. With minimal marketing, we have been recording an average of five-six transactions every day through this service. Given the high internet usage among the younger age group, we have seen the maximum interest among the 25-35 age group.”
HDFC Mutual Fund has also launched a mobile phone-based platform to allow investors to buy, sell or switch funds as well as access account information. It offers the service through mobile commerce service provider ngpay, which facilitates transactions such as buying travel tickets or paying utility bills.
Investors holding a mobile banking account in HDFC Bank can avail of the facility but the investment is capped at Rs 10,000 per day due to the restrictions imposed by the Reserve Bank of India.
UTI Mutual Fund is planning to launch a similar facility. Jaideep Bhattacharya, chief marketing officer, UTI Mutual Fund, said, “We are planning to target the 400 million mobile users with M-Commerce, which will be launched next month. All mutual fund transactions can be done through this facility.”
