PremiumCencom can be used by investors, irrespective of whether any transaction was done on MFU or elsewhere, Ganesh Ram, MD & CEO, Mutual Fund Utilities said
Listen to this article |
An investor can use our unique centralised compliance module—Cencom—free of cost to track all compliances and queries in a single place on our platform, Ganesh Ram, MD & CEO, Mutual Fund Utilities (MFU)—a platform that investors, distributors and other intermediaries can use for MF transactions—tells Mint in an interview. MFU is promoted and funded by the MF industry. Edited excerpts:
What does MFU offer to mutual fund investors (individuals) today?
We need to understand the purpose of MFU. Market regulator Sebi had asked the Association of Mutual Funds in India (Amfi) to form MFU way back in 2009. We are a common platform that has option for both direct and regular investors. Compared to fintechs that offer a plain vanilla transactional platform with some technology around it, MFU offers many features. All financial and non-financial transactions are also completely available online. Also, you can change your mobile number, email ID, bank account, and even choose a nominee now. We also offer trigger-based transactions which means, for example, I can schedule a redemption in MFU once a scheme's net asset value (NAV) reaches a certain level. Then, our system will automatically redeem the units when the NAV hits that mark.
You can see all your MF holdings and your returns live, all in one place. Also, the onboarding for an investor is very easy and regulated. So, once you put your PAN in our system, we ping the KRA (KYC registration agency) database and take all the investor details from them. We also ensure the investor uploads a bank proof and we do a penny drop to ensure that the bank account is in the investor’s name itself. Your account will be opened in 10-15 minutes. On the backend, while the operations team is verifying your account credentials, you can start transacting. But the transaction will flow to the RTA (registrar and transfer agent) only once your CAN (common account number) has been approved.
Can investors do SWP (systematic withdrawal plan) and STP (systematic transfer plan)? Can transactions be done for jointly held folios too?
Yes, these can be done – STP, SWP, purchase and redemption. You can be a single holder or a joint holder, everyone can transact. Apart from that, we have scheduled transactions. So, for example, if I am a salaried person and I am expecting my bonus on the 31st of March, then I can schedule an investment in an ELSS for that date.
Whatever the regulator allows and the AMCs are doing, is available on MFU. Only a few things like transmission, which is still a physical process, are still not possible.
Can a first-time investor initiate KYC and start investing through MFU?
An investor can do an e-KYC and this takes just10-15 minutes. You need to have a PAN and additional proofs. But you can transact only once your KYC is approved as per regulation. Just yesterday, regulation has come for using e-KYC Aadhaar authentication services of UIDAI for SEBI registered intermediaries. MFU will look at enabling e-KYC Aadhaar authentication services as per the regulatory framework. Right now, video-based KYC is available where the geo-tagging happens and then you need to show your PAN and other approved proofs.
Do you plan to promote MFU as a direct investor platform? Is there a budget for this?
We are a common platform for both direct and regular (come through an intermediary) investors and do not differentiate between the two. You will never see an AMC promoting only direct and not regular option. It’s the same for us. The budget is the same, everything is same. So, we do all our marketing sales pitch for the future. Our mission is to increase the usage of MFU and we don’t really worry whether it comes through a distributor or comes directly.
Even a lot of distributors are not aware of MFU. The awareness is there but we need to push it more and when we do, it will push both the channels together.
Is MFU dominantly a B2B platform?
We have close to 38,000 distributors / RIAs / PMSs, and around 600,000 direct investors registered on the platform. We are almost 90-95% driven by intermediaries and the rest by direct investors. So, it is predominantly B2B. Pre-covid, we had around 250,000 direct investors and today, we are inching towards the 600,000 mark.
How do you offer customer support?
Customer service is something in the MF industry where there is scope for a lot of improvement. But having said that, I can affirm that ours is one of the best platforms for customer support. The reason why this is so because a majority of customer service queries come when a customer doesn’t know what happened to his transaction. What happens on MFU is similar to how it happens on Amazon or Flipkart – when you order something, they will tell you that it has been packed, shipped, etc. So, we have a transparent transactional lifecycle for the investor and he can see the time and date when he initiated the transaction, when he made the payment, whether it has gone to the payment aggregator and from there to the AMC and so on. So, 50% of our queries get filtered out.
We have a very unique module, which none of the platforms have. It is called centralised compliance module or cencom. An investor or an intermediary can use this module free of cost to track all his compliances and queries in a single place, irrespective of whether the transaction was done on MFU or elsewhere. So, you can put your folio number in cencom and raise a query. This is accessible by the AMCs and the RTAs and they will reply. So, the resolution time is ten times faster than on any other platform. And if they don’t respond, there is an automatic trigger alerting them.
Beyond this, we have our own Telegram and WhatsApp groups and I am part of these. We have a very active social media presence. We also have a customer helpdesk available from 8am to 8pm, Monday to Saturday.
Are there plans to launch any new features on MFU? When you were last interviewed by Mint in September 2021, you had mentioned a few new initiatives such as multi-feature portfolio analyzer and risk profiling for investors. Have these been introduced?
Yes, both of them have been introduced. We have also launched an NFO module. So, you don’t need to go to each AMC website. We pick up the salient features of every NFO for the investor to see and then they can make the purchase from there itself. We have recently launched something called the MFU Box which can be used to generate a CAS and also a capital gains statement. You can see your portfolio in a graphical way and your XIRR.
Now, we want to introduce a self-help module and we are working closely with the AMCs and the RTAs. So, when you open a CAN, your entire portfolio gets mapped. If there is an error, say the RTA hasn’t pushed all the folios, then you put a complaint and we raise it with the RTA to align it. So, with the self-help module, the investor will be able to do this on his own. The self-help module is something we are passionate about and are working towards it to benefit the investors and the ecosystem.
The other major thing is we have applied for a KRA licence and we have got in-principle approval. So, we are in the process of creating a subsidiary, which will be our KRA. So, then we can enable e-KYC. For an investor, this will be faster and more efficient.
Another thing which we’re also trying to do is with respect to the nomination-related regulations that come into effect from August. So, we are trying to make it simpler for investors. From 1 August, an investor who opens a new folio will need to nominate or say ‘no need to nominate’. We are creating an online form for this. We are also working on enabling a situation where an investor can have one nominee for one set of folios and another nominee for another set of folios.
From 1 August, you can’t use existing investor signature from records, but it must be a physical signature or an e-sign. We can have e-sign facility enabled but the investor also should be comfortable in enabling and using e-sign. Today what happens in MFU is that an investor fills the nomination form online, the MFU system gets the details of the investor (including signature) from validated investor CAN records and submits it to the AMCs/RTAs. But now regulation says that wet signature cannot be done. Either the investor needs to actually sign it, or e-sign it.