Mutual Fund Investments Going The Digital Way
E-commerce has practically captured every facet of our lives today. Whether it is transacting online, purchasing groceries, planning vacations or trading in stocks, everything can now be done in a jiffy. Access to internet and smartphones enables us to conduct the entire chain of transactions within four walls of our home or office – which also saves time and money. Thus, as more number of people choose to go digital, can the mutual fund industry remain seated on the fence? Asset management companies are now ramping up their websites and giving investors access to applications (apps) to improve/widen their reach. Read on to learn more about recent initiatives like the ‘e-KYC
(know-your-customer)’ with Aadhaar details and benefits of making online investments in mutual funds.
Sample some of the tools available:
These are most commonly used for online investments and available under three options:
MF Utility / R&T platforms – Investors could also access platforms launched by the Association of Mutual Funds in India (AMFI), MF Utility and Registrar and Transfer (R&T) agents, such as the Computer Age Management Services (CAMS) and Karvy. R&T platforms allow investors to transact and track their empaneled mutual funds. The AMFI has launched a single-window platform — MF Utilities - a transaction aggregating portal that enables users to transact in multiple schemes across fund houses.
Proliferation of smartphones among Indian investors has increased use of mobile apps, which are of two types - a) apps run by individual fund houses and b) apps created by third-party distributors / R&T agents.
Social media/ messaging services
Growing popularity of social media/ messaging services such as Facebook and Whatsapp has prompted few fund houses to take this route to reach investors and send them regular updates.
The Online Space for Mutual Funds
e-KYC with Aadhaar details
Every individual needs to fulfil KYC norms for investing in mutual funds. Moving forward from the process where investors had to submit paper forms and also need to undergo in-person verification, CAMS recently introduced Aadhaar-based e-KYC- a paper-less process for those who have not fulfilled these norms. The initiative was launched after the Securities and Exchange Broad of India (SEBI) allowed mutual fund houses and market intermediaries to verify their clients’ credentials, using the Unique Identification Authority of India (UIDAI) and verification done through biometric authentication & a one-time password received on the client's mobile number or e-mail address registered with UIDAI, provided the amount invested does not exceed Rs. 50, 000 . Many Mutual Fund houses have launched this e-KYC option on their websites whereby a non KYC compliant investor can visit the website, get KYC compliant and start investing in mutual funds online immediately.
Goal / SIP calculator
For most investors, it is a tussle to fulfil unlimited wants using limited means. Building a huge retirement kitty, saving for children’s education and marriages, foreign vacations etc. are some of the commonly identified goals. Yes, it is possible to turn these aspirations into reality by planning ones’ savings and investments. Systematic investment plans (SIPs) offer investors immense opportunity to invest at regular intervals, seek capital appreciation and generate wealth over the longer run. SIP calculators
can help investors determine the amount they need to invest in order to attain a specific goal, once details such as income, risk profile, goals etc. are keyed in.
How you benefit from online mutual fund investments?
Technology has certainly eased the process of investment and also enabled people to track their portfolio regularly. Investors can enjoy access to online information on their underlying investments and thus, avoid hassles of maintaining physical records. Platforms run by third-party distributors/ R&T agents allow individuals to invest in multiple schemes offered by different mutual fund companies at a single shot.
Tech-savvy investors can enjoy the benefit by investing in direct plans via the individual fund house. The investor also saves on time as the online process works much faster than the traditional physical mode.
Most of these platforms also provide value-added services such as a customised portfolio and in-house research notes, on demand. This is far more efficient if compared with waiting for regular product literature in the physical form from the fund house.
Mutual Fund investments are subject to market risks, read all scheme related document carefully.
Any information contained in this article is only for informational purpose and does not constitute advice or offer to sell/purchase units of the schemes of SBI Mutual Fund. Information and content herein has been provided by CRISIL Research, a Division of CRISIL Limited, and is to be read from an investment awareness and education perspective only. The views / content expressed herein do not constitute the opinions of SBI Mutual Fund or recommendation of any course of action to be followed by the reader. Investors should consult their financial advisers before taking any investment decision.