Vernacular and voice are going to be keystones for finance

Nippon India Mutual Fund claims to be one of India’s largest asset managers with an AUM of Rs 4.31 trillion. This is remarkable because the MF industry itself is eyeing Rs 100 trillion AUM and a five-fold rise in the investor base to 10 crores over the next 10 years. If India ranks #17 in the global asset management industry based on AUM and has surpassed China in its penetration as a percentage of GDP, what is the best way to make the most of this momentum? Can technology add a solid appreciation rate to this industry? In an interaction with Dataquest, Arpanarghya Saha, Chief Digital Officer, Nippon India Mutual Fund, answers that as he also calculates the impact of a single MF platform as proposed by the regulator, of Robo-advisors, and of financial literacy levels. Excerpts:

DQ: What have you learned about digital transformation in your stints at various financial majors like Citigroup, Max Life Insurance, and American Express Banking Corp and the start-ups that you have worked for?

Arpanarghya Saha: I moved into the digital, it’s been about two decades. The first assignment was to do email acquisitions on the platforms available then like Hotmail and Rediffmail. This was at a time when marketing and brand management was the sought-after role, but I took the chance of savoring the unknown.

That choice helped and one key takeaway for me as a learner from two decades of experience across various stints across industries is that digital transformation is a perpetual journey that an organisation embarks on. And it must start right by getting the talent pool who have seen action in this vector consistently and can bring in the experience, failures followed by the real learning. This is an absolutely niche area, highly quantifiable and measurable, clear link with P&L + ROI – thus a clear ‘no’ for fancy talk, PPTs, spray, pray, or anything glamorous!

Digital is always in an ever-evolving state where you keep building, optimising, enhancing, and re-building to stay ahead in this ever-changing world.

By the end of this year the Indian language internet users are expected to be at 534 million while the English-speaking user base will stand at 199 million.

DQ: So what is the right reason to invest in digital?

Arpanarghya Saha: The reasons for an organisation for digital transformation to get aboard could be different – for some, it is to deliver long-term strategic business goals, for some others it is about reinventing and building up everything grounds-up to stay relevant, for still others it could be about serving a new segment or coming up with a new product, and for a few others, it could be accelerating innovation.

However, the underlying essence is that digital is always in an ever-evolving state where you keep building, optimising, enhancing, and re-building to stay ahead in this ever-changing world. Digital is a perpetual beta and so is the digital practitioner’s learning in this space.

DQ: What technology imperatives should India embrace as we move towards the Rs 100 trillion AUM mark? Can we use technology for better penetration, financial inclusion, and investor literacy?

Arpanarghya Saha: This expansion will be primarily driven by new investors, just by the very quantum of them who have still not started investing in mutual funds. Again, most of these very young potential investors will come in from B30 and the hinterlands of India. The fintech industry will see the same purchase transition that retail e-commerce players saw five years ago, the higher velocity of business coming in from small towns rather than top cities. To be prepared for this, vernacular and voice are going to be the keystones that will help the financial services sector drive better penetration, financial inclusion, and investor literacy.

In a country that has a hundred major languages and a thousand and a half regional dialects, it is no surprise that the next wave of growth on the internet is being powered by people who are non-conversant in English. By the end of this year, the Indian language internet users are expected to be at 534 million while the English-speaking user base will stand at 199 million.

For us to make serious inroads into ‘Real Bharat’ and to cater to the diverse needs of these masses, we have to build scalable and multilingual platforms, create timely, relevant, and localised solutions, and put out engaging content; basically, get an entire vernacular ecosystem up and running to drive the next phase of growth for the industry.

DQ: Are efforts like the SEBI-advised one-stop MF platform helpful? Are they plausible? Especially from a tech point of view and in an ecosystem that struggles with digital immaturity, fragmentation, and heterogeneity?

Arpanarghya Saha: Whether the platform itself will be lapped up by investors or not, only time can tell, but I can confidently say that this is a step in the right direction by the SEBI and the move is completely plausible. It will result in massive convenience to the investors since the proposed ‘single window for services’ framework is much needed and will bring relief to investors as they won’t have to talk to multiple entities to change or update the same set of information.

Intelligent data enabled direct to customer digital platforms will help organisations offer the right product and service to the consumer at the apt time.

The Integrated Campaigns framework helps us cater to a customer base of more than 99.82 lakh folios by driving deep digital engagement.

From a technology ecosystem standpoint, I believe it will be good for the industry at large. We all know what the Digital India stack has done for the country. In a similar way, this collective initiative will not just result in a platform but also have a huge impact on the core digital infrastructure itself.

The current ecosystem struggles with digital immaturity, fragmentation, and heterogeneity. This initiative might turn out to be the cure to these ailments as there will be a modernisation of back-end services powered by newly built APIs, standardisation in quality and offerings, and a consistent service bouquet across the various platforms of choice for the consumer due to the above unified tech integrations.

DQ: Can share something about the service and revenue impact of Robo advisors in the MF industry?

Arpanarghya Saha: Let us understand the basic role of Robo advisors. They are a response algorithm that is fed with answers to frequently-asked-questions. Over a period of time, the questions become more specific from customer to customer, and the Robo advisory is enabled with Machine Learning abilities which further respond with deeper and enriched answers to specific questions entity-wise. This by itself is a core mechanism and currently gaining importance on the self-serve paradigm that organisations are moving to.

Thus, basic service needs are taken care of through this feature but for more personalised service, the mechanism has to evolve and learn. Yes, this has an impact on both the service and revenue model for the brand. Self-serve has always been a delight for the consumer and an intelligent + prompt Robo Algo leaves behind a high customer sat score. Human-led interventions like inbound calls decrease for the brand, bringing down redundant service costs which affect the operational margin.

DQ: How much can AI and blockchain do to redefine and simplify this industry? Are we ready for that much disruption?

Arpanarghya Saha: Intelligent data-enabled direct-to-customer digital platforms in this industry will help organisations offer the right product and service to the consumer at the apt time. It will also be able to converge market cycles and customer investment patterns, thus ensuring real-time personalised enablers that could be beneficial for the investor in his journey of building wealth and identifying both market potential and disruption. It will also be a most sought-after tool that will be widely used by the AMCs to create stickiness for their set of consumers in this wide marketplace and in case of automated investment research factoring in Timeline Series various derivatives

Blockchain, on the other hand, will help reduce costs for the organisation and enhance experience and ease for customers. A great probable use case in this industry would be blockchain bringing in the ‘One Customer, One Onboarding’ philosophy for all the 40+ asset management companies in India. This eventually will augment higher inclusion and reduce costs.

Any positive disruption is always welcome, and one must be ready to ride on such Digi-mechanics to serve the new generation of consumers in this oligopolistic BFSI – Tech’d market.

DQ: Do you think that disintermediation in the MF space will balance investor awareness and knowledge, especially when financial literacy is a big question mark in India? Can technology help?

Arpanarghya Saha: India has started becoming a hub of tech platforms and the uptake rate across the diversified geography is beyond expectations, thus, proving a point that when people are presented with innovative ways to learn, adoption follows.

In the case of our industry, with respect to investor education and financial literacy, the future lies with an industry-constellated digital learning platform powered with the best of tech chassis. This will not only bring in diverse knowledge from various houses, but it would also make the learning experience uniform for all interested in this sector.

We are working on a scale-up of WhatsApp capabilities to build a dedicated and full-fledged 360o digital channel with complete transaction.

DQ: What are you excited about for 2022? Have 2020 and 2021 been good or bad for the industry overall?

Arpanarghya Saha: India has started becoming a hub of tech platforms and the uptake rate across the diversified geography is beyond expectations, thus, proving a point that when people are presented with innovative ways to learn, adoption follows. The year 2020 was a watershed year for us as far as digital business is concerned. With complete lockdown in place owing to the COVID-19 pandemic, our digital infrastructure ensured that Nippon India Mutual Fund continued serving its investors, individual distributors, and partners in a completely paperless, zero-touch, and virtual manner. We not only ensured steady business inflows but also nimble-footed built new features and interventions to drive growth and retention. The results: we witnessed 86% growth in digital AUM and 30% growth in digital purchases while witnessing a 54% increase in profits from digital business.

Year 2021 has also augured well for us and we have managed to carry forward the momentum from last year and we continue to post steady growth month on month.

DQ: Are you betting on something fresh ahead?

Arpanarghya Saha: For the remainder of this year and for the Year 2022, we have set ambitious targets for ourselves with the aim of driving penetration in untapped segments and venturing into newer markets. Yes, some new projects are on the anvil, like our new investor app which is built for the new wave of Millennial and Gen-Z digital-savvy investors. Also in progress is vernacular coupled with voice, as it will cut across language barriers and empower prospects to invest by simply talking to our assets in their preferred language. We are also working on a scale-up of WhatsApp capabilities to build a dedicated and full-fledged 360o digital channel with the complete transaction, service, and engagement capabilities without any redirections or breaks. Plus, we will be strengthening AI and ML capabilities which coupled with our data lake advent will take our customer profiling and analytics to another level.

DQ: What are your favorite pieces in the digital blueprint of Nippon India MF?

Arpanarghya Saha: Although this is akin to asking a parent which kid you love the most, I will still try to answer this as objectively as I can.

From giving investors multiple choices across web and mobile in with our website, m-site and mobile apps to helping mutual fund distributors tend to their business through our Business Easy 2.0 app. From building a dedicated digital asset for our institutional segment for new business generation, on-boarding, and transactions to making a robust partner API stack facilitating end-to-end digital integration with fintech platforms, financial e-marketplaces, and distribution, we have crafted our digital assets with perseverance. We take pride in these endeavors and have won many laurels, awards, and accolades for NIMF.

However, there are two things that are very close to my heart – Conversational Commerce and our Integrated Campaigns framework. Conversational Commerce is a one-of-a-kind, industry-first across APAC, cutting-edge solution built in collaboration with Google which allows investors to do pureplay financial transactions through an easy and intuitive medium – the human voice. The Integrated Campaigns framework helps us cater to a customer base of more than 99.82 lakh folios by driving deep digital engagement.