Interview - Building the Discipline for Digital - A. Balasubramanian
CFO Insights in conversation with A. Balasubramanian, CEO, Birla Sun Life Asset Management Company to understand the indispensible role of technology in creating opportunities, building trust, and mitigating risks
With digital interventions, businesses are seeing improvement in customer experience, productivity and turnaround time. Being in the business of asset management, what is your strategic focus – disrupting with new technology or improving existing technology for competitive advantage?
In this age of Digital Disruption, it is important to keep pace with the changing expectations of our customers, while providing a sense of trust and stability.
We are using technology to increase transparency in our dealings with our customers, which further strengthens their trust in our brand. The onus of this lies not with one team alone. We have in place a cross-functional Digital Evangelist Team that functions as a business partner in driving growth using digital and technology mediums.
The path we have chosen is to upgrade our core technologies and processes to provide a stable back-end, and use innovative digital ideas to transform the way our customers experience mutual funds with us. This ensures that as innovations are introduced at various touch points with customers, the infrastructure which forms the backbone of the operation remains robust and stable.
We introduce new features across our digital platforms on a regular basis to keep enhancing the customer experience and recall. This discipline in process and experience enhancement ensures that innovation is now in the DNA of the organization.
Risk adjusted returns is one of the primary considerations in asset management. How is Birla Sun Life Mutual Fund utilizing technology to better detect and mitigate risks? What are the technology interventions that contribute to delivering superior ‘alpha’ consistently?
First and foremost, we have in place a strong governance mechanism and have over the years, strengthened our investment processes. While fund management does their job of managing money efficiently, they are also supported by technology driven analytics for both trend-spotting, as well as identifying areas of risk. Risk is largely to begin with, a deviation, which is then closely examined for other risk parameters. We use MSCI Barra to help the portfolio to do attribution analysis at regular intervals. The team is also enabled through high-speed servers to analyse various data points and finally shortlist potential winners in order to help them create alpha in the portfolio.
How is technology helping asset management companies align with the new paradigm of proactive regulation and compliance?
Frankly, compliance requirements have gone up manifold as it is happening for the banking industry as well. Therefore, it is becoming more important to create a strong vigilance system in order to stay compliant both from the regulatory perspective as well as internal risk perspective. This also includes our internal governance mechanism as defined by the Board of Trustees. To cater to the new paradigm in compliance, it is critical to have technologies which are flexible and nimble enough to align with the changing regulatory landscape. It helps to have Indian technology partners who understand the local specificities and are able to quickly incorporate these changes into their product or solutions architecture. It is also essential to have an overall system architecture which is open and adaptable enough to be able to integrate regulatory driven changes quickly without impacting the overall stability of the systems.
Asset management has become increasingly competitive. How is your organization leveraging Social Media, Analytics, Cloud & Mobility (SMAC) and other digital enablers to create mindshare and acquire customers?
For us SMAC is a big opportunity for enhancing engagement, promoting DIY and increasing sales. Some of our initiatives under each are as follows:
We use social to educate, engage and service. We have developed a robust platform for investor education through Jaanoge Tabhi Toh Maanoge, which drives interactivity and sharing through a diverse mix of thoughtfully developed content.
We especially use engagement during key festivals and social occasions as opportunities to popularize mutual funds as a category. The engagement targets participants back with a customized mutual fund solution. For example, our #FukatKeKharche campaign on New Year’s Eve 2015 aimed to make people realize how they could benefit when wasteful expenditure is channelled into mutual funds.
Twitter and Facebook are popular platforms which provide us with an opportunity to service 24x7. In our experience, good online service recovery results in better brand salience and generates opportunity for more sales. Our digital team has strong proficiency across a suite of analytics tools like Google Analytics, Wingify etc. Analytics not only helps us track behaviour and customer experience on our digital assets, but has also has helped us enhance our goal funnels on assets by upto 200% this financial year.
We are constantly exploring mobility in terms of platforms, applications and technology to further our reach, as well as enhance service and transactions for both internal and external customers. Towards this our endeavour is to build an API supported tech ecosystem that can consume services from digital leaders like Google, Facebook etc. to enhance our customer experience. Currently we use the same as branch locator on our website and Facebook login for our customers.
Speaking of apps, we have recently launched 3 user-friendly Mobile Apps – BSLMF FinGo, BSLMF FinGo Partner, and BSLMF Active Account. Our latest App, BSLMF Active Account is a liquid fund based mobile application which helps investors earn from their surplus savings by activating money with a single swipe. With over 2.5 lakh downloads and transactions by around 1,00,000 customers, it has been very well received by the industry and investors alike.
How are you tapping into digital channels to make investing easier as well as knowledge about investments easily available for your customers?
Digital is now a 24x7 channel towards educating, informing new-to-category customers and providing a platform for seamless purchase and transaction.
Our dedicated investor education website, Jaanoge Tabhi Toh Maanoge helps users learn about the various facets of mutual funds and how it can make a difference to wealth building, and financial planning. On the purchase side, we were the first to introduce eKYC which was a totally online Aadhaar based KYC. With this, one can start investing within 2 minutes for any mutual fund.
Our SIPNOW microsite, which is highly user friendly, makes the buying journey so lucid that assessing risk appetite, investment horizon, and choosing funds takes under 5 minutes. The entire buying journey here has been made so easy using robot-advisory technology. This site is mobile friendly and has generated good traction for us. Several of our distribution partners have asked us for a white labelled solution of the same, and we will be developing this for them within the next few months.
All this has had a positive impact on our offline buzz as well. We have seen a direct correlation between our online activations and education to our overall business growth.
There are plans to allow investing in mutual funds by using digital wallets. How do you expect this to impact the asset management business?
Digital Wallet is definitely opening up a new channel for the mutual fund industry for acquiring both customers as well as assets. In order to grow this channel among other channels, there is a need for regulatory changes which I assume is under way. While regulatory changes are awaited, we have prepared ourselves for the back-end connectivity for money transfers from eWallet accounts to our funds and vice-versa. It is no doubt a new opportunity, given the under-penetration that exists in the mutual fund industry. This opportunity however, will still remain small in relation to the overall growth.
Digital revolution has empowered your customers with more information and more options to choose from. What has been Birla Sun Life Mutual Fund’s plan to align with this evolving business paradigm to drive customer value?
As an asset manager in the digital space, we benchmark our efforts to standards set by leading players in the e-commerce segment such as Amazon, Flipkart, and Uber among others. We endeavour to be able to provide to our customers an experience which is at par with these players, or something even better. For example, our Active Account Mobile App which was recently launched is a revolutionary mobile app which has shifted the paradigm with respect to customer experience from a financial mobile application.
Since the financial literacy in our country especially with regard to mutual funds is yet to gain momentum, it is our constant pursuit to be able to provide solutions for our customers’ financial goals in the most simplistic manner. Through SIPNOW, we have also introduced robot-advisory service to help customers visualize their goals and plan their investments accordingly. Furthermore, our dedicated Digital Evangelist Team is constantly striving to uncover the next BIG disruption to bring to the market. I am also extremely bullish on the AMFI led Investor Education Campaign which would create a big pull for mutual fund industry as a category over the next few years.