The future of every industry relies on collaboration and teamwork, where technology plays a driving factor in getting things systemized for enhancing growth. Emerging economies like India are scuffling with the inducements of globalization and channelizing strategies effectively to bring transformation in the financial sector of the country. One such ambitious domain is the Mutual Fund industry that has undergone a dynamic transformation in the previous five years to mark its roadways into history. An interim phase between the years 2008-2011 saw a loss of faith in public where the assets under management (AUM) saw a mere growth of about 18-20%. This trend was quashed later in the past half decades with the industry’s AUM galloping ahead. By leveraging technology, the mutual fund industry did an applauding job by getting assured that the client’s experience is constructively worked upon.
Technology shaping the Mutual Fund investments in 2019
Reaching the paperless experience: Earlier, the mutual fund investors had to plod through the stack of paperwork to initiate their task of investment or any other matter concerning transactions related to investments that were already made. Besides retail banking, it makes a sense noting that only the mutual fund industry has been developed on a platform based on technology that completes the entire process chain right from fund-collecting, investing and finally redeeming it. Even investors can easily calculate the SIP with a mutual fund calculator to make the payment on a timely basis. The inescapable technology without relying on the physical medium performs an array of functions related to mutual funds like fund management, transaction processing, funds disbursal, and even customer servicing.
Mutual Fund Calculators: Previously, comprehending the entire mechanism of mutual fund was complicated and risky. However, with the advent in technology, almost all the fund houses are providing a mutual fund calculator to do all the computations online for free, By furnishing basic details like investment tenure, accumulated amount and rate of returns one can get a transparent estimate regarding the amount they should invest over a period of time. There are different mutual fund calculators available like SIP calculators, lumpsum calculators, etc. to ease the process of calculation. Even novices can make investments easily and know about each and every detail regarding such investments simply by using a mutual fund calculator.
E-commerce a future forum for distribution: Former SEBI chairperson U.K Sinha had earlier announced in the year 2015, that E-commerce platform can be a vital medium for distribution of mutual funds online very soon. This essentially puts stress on the fact that now you will be able to purchase mutual funds quite conveniently just like you buy other products on e-commerce websites like Flipkart and Amazon. The complete abolishment of the advisory panel from the financial ecosystem and its impact on the investors will reflect over a period of time and is a matter of speculation. However, the significant doubt lingers over the protection of the clients from falling prey to vicious traps of investing and handholding them.
Transactions with ease: In context to the last five years, there has been a vital uptrend delineating the ease of first-time investors of mutual funds. Subsequent documentation uploading can be achieved through the process of e-KYC. Using advanced platforms like StAR MF, BSE’s, AMFI Registered Mutual Fund; investors can get rid of bottlenecks like moving the paper to and fro by switching, purchasing, or trading mutual fund units on behalf of their clients online. A large group of liaisons has adopted the total technology dependence to stay connected in the system. In fact, the removal of the physical layer has fostered a new model of mutual funds distribution without the need of corporal presence.
Use of technology like terminals: Way back in the 60’s the technology of terminals was introduced, but now with the progressing technology, it is also accelerating its growth. This offers a cloud-based software in which chunks of data can be uploaded. This helps in sourcing the data effectively to the traders. Secured networks, along with provisions of working in real-time facilitate updates in markets and pricing. Requisite market data can be swiftly evaluated by the investors within a couple of seconds through the electronic trading terminals. Investors get easy access to the latest statistical reports and market news through these terminals.
Trading through online: In the era of technology, online trading has profoundly impacted the experience of a trader in trading. Now through the medium of online trading, investors can place orders for their own trade. Those days of calling the brokers to place a trade had evaded with time. Investors can fetch information about current stock prices, news, alerts, and related things through the online platforms developed by these brokers.
The next level of technology makes us think about features like artificial intelligence making investments and big data used for analyzing market psychology. The world of investing will be taken to the next level and become more synchronized as technology keeps upgrading.