Digital Disruption – Accelerating Product Innovation and Distribution
Anup Bagchi, CEO & MD, ICICI securities discusses the need of strong surveillance system for the distributors platforms.
Subscribe to Outlook Money for more: https://goo.gl/jHD2AA
#DigitalDisruption #OutlookMoney #Money #OutlookMagazine #OutlookGroup
Subscribe to Outlook Money for more: https://goo.gl/jHD2AA
#DigitalDisruption #OutlookMoney #Money #OutlookMagazine #OutlookGroup
Transcript
00:00 [MUSIC PLAYING]
00:03 You are on a distributor--
00:09 you have a platform.
00:11 And people are onboarding.
00:13 That's an easy process.
00:14 But where does it leave you on a fiduciary role
00:17 as to how much do you--
00:18 onus is with you resting in terms of how much are you
00:22 responsible for what actions these people take
00:24 on your platform?
00:25 No.
00:26 So two things.
00:27 One is from a surveillance perspective.
00:29 And we should not undermine this whole thing.
00:31 Because in a nameless, faceless situation,
00:34 people can do mischief.
00:36 And you may not know.
00:38 Not that in non-digital organizations
00:40 you cannot do mischief.
00:41 But there could be perhaps layers who might catch it
00:45 or sense it.
00:46 So we have a very strong surveillance system
00:49 from a broking perspective, which is why TouchFoot--
00:52 we haven't had a Mishap.
00:54 But it's difficult to get away with it
00:55 if you have a strong surveillance.
00:57 As far as the activities are concerned,
00:58 whether they are doing good or not on our side,
01:02 we advise them.
01:02 But beyond a point of time, you cannot tell them.
01:06 If a client is churning, a client is churning.
01:09 Who are we to tell them to stop churning?
01:11 Or who are we to tell them, actually, churn more?
01:14 And I must also say that two things.
01:16 As far as need creation is concerned,
01:18 I think mutual fund industry has done a very good job of SIP
01:21ization of the whole industry.
01:22 Seven years, eight years back, I think
01:27 SIP used to be less than 500 crores a month.
01:31 Now it is almost touching 3,000 crores a month,
01:34 I think which is a big shift by any imagination.
01:37 So I think need creation has happened.
01:39 And also because SIP is a smaller installment,
01:41 people think that the risk is low.
01:44 You know they do it.
01:46 But I must say that the persistency levels
01:49 has to be still brought up.
01:50 And that is where I think more education is required.
01:52 Because the persistency levels are not that great.
01:54 But still, I would say 50%, 55% persistency level
01:57 is not atrocious.
01:58 But it should certainly be moved up to 75%, 80%.
02:01 That is when people will really get--
02:02 investors will get benefit of SIPization.
02:06 As far as all other things of churn, et cetera, is concerned,
02:09 well, you know, if customers decide that churn is good,
02:13 churn is good.
02:14 But fortunately, what has happened
02:16 is the way the compensation has got aligned
02:19 to the distributor of more to less.
02:21 At least there is less incentive for distributors.
02:24 I will not say zero incentive, but less incentive
02:26 for distributors to do this mischief.
02:28 I really feel that it should be aligned even more so
02:31 that we are really-- the full thing is aligned.
02:34 [MUSIC PLAYING]
02:38 [Music]