CAMS manages vast data for mutual funds, private equity, banks, NBFC, insurance companies and even brokerages. As mutual fund investments are long-term in nature, technology platforms business processes and controls are designed to protect the interest of investors.
This includes special processes for managing dormant investor accounts, minor accounts and transmission of investments. N .K. Prasad, Group CEO, CAMS Group, spoke to The Hindu on managing investor data confidentiality and processing risks.
What is CAMS role in the BFSI ecosystem?
CAMS, registered by SEBI as a registrar evolved over years as a technology enabled financial infrastructure provider. Several technology solutions and service innovations have helped improve investor trust, confidence in the new category of mutual funds, increased participation through expanded reach and facilitated cost efficient delivery of uniform investor service standards across the country. Consolidated account statement across various mutual funds, an original innovation of CAMS in 2008 has now become a securities market practice. CAMS’ initiatives in cost-efficient servicing of small ticket monthly systematic investments over the years have helped our clients grow this category to over 60 lakhs. This is significant because net inflows into equity mutual funds lend stability to capital markets.
Currently, CAMS provides unique combination of B2C and B2B services to asset management companies, venture capital firms, life insurance companies, general insurance companies, select banks and non-banking financial institutions.
Does your delivery meet the brand promise of each fund?
CAMS is an entity neutral service solutions partner to the mutual fund (MF) industry having no conflict with competing asset management companies (AMC) and competing intermediaries. Our company’s mission is to pursue growth of our clients, which in turn drives our growth.
As outsourcing partner we have aligned vision and purpose with each AMC and co-create service delivery model and customizations for each AMC.
Our management processes, governance systems are aligned to deliver brand promise of each client and protect strategic, reputational, operational risks associated with outsourcing. The real proof of this is long lasting relationships CAMS has with its clients over two decades who have started their MF business and grown manifold.
What are the benefits of investing in mutual funds?
MFs are a versatile financial investment option for retail investors as it brings the benefits of diversification for meeting individual investment goals, tax benefits, professional fund management, risk adjusted returns, instant liquidity and at no explicit costs to investors. It is a well-regulated product.
MFs have proven to be the route for long term wealth creation. There is a strong correlation of course between longevity of investment and return maximization.
Data shows schemes have returned an average 25 times to investors who have stayed invested for 15 – 20 years. Systematic Investment Plan (SIP) is particularly suitable for retail investors as a savings vehicle, bringing the benefits mentioned earlier even for a commitment of Rs.1,000 a month.
How does CAMS help in transitioning the mutual fund schemes?
CAMS has carried out many scheme mergers and has a mature processes supporting pre/post-merger communication, non-deduction of load during window period, non-applicability of relevant load/STT/TDS during mergers, printing of modified statements, administering brokerage post mergers, computation of capital gains, tax obligations.
Such mergers are done over week-end / non business days.
Can you comment on how MF investors comply with new tax norms?
CAMS has implemented online updation facility to submit the new requirements under FATCA and supplementary KYC.
Forms are also available at our service centers or can be downloaded from CAMS website or from AMC sites.
We have created a central database for FATCA compliance to facilitate one time submission of forms.
This immensely benefits the investor as he /she does not have to repeat the process while investing into a new fund.
What makes CAMS an attractive investment proposition?
CAMS is proud to have National Stock Exchange Strategic Investment Corporation Ltd (NSESIC) as a shareholder in its growth journey. NSE, India’s leading stock exchange, has brought about unparalleled transparency, speed and efficiency, safety and market integrity. CAMS has held market leadership in serving the Indian MF investors.
NSE’s stature would strengthen the Institutional character of our institution. CAMS and NSE have complementary capabilities for serving the securities market. Our market offers tremendous potential in channelling household savings in to productive investments to help grow the economy and helping investors achieve their financial goals.
Can you name some of the new technologies you deployed over the years?
Technology forms the backbone for our excellence in high volume transaction processing and services delivery. Our applications and infrastructure are all developed and maintained in-house. This gives us the flexibility, technology, domain capability and demonstrated scalability to handle any explosive growth in mutual funds volumes like what we witnessed in 2007-08. While the IT application suite has matured into a mini-ERP (Enterprise Resource Planning) like ecosystem, the infrastructure landscape has evolved rapidly from rudimentary storage systems to SAN (Storage Area Network) based and now we have large scale enterprise servers and storage. We are early adopters of SSD (Solid-State-Device) technology and our applications have evolved to address today’s needs on social, mobile and analytics.
What has been the response to myCAMS mobile app?
Mutual fund investors are taking up to digital channels pretty actively in the last couple of years. Investor’s appreciation of the digital convenience is evident in the 50 per cent increase of online transactions and 400 per cent increase in mobile transactions.
CAMS powers the websites, portals and apps of mutual funds to enable real time transaction acceptance. CAMS digital initiatives, such as myCAMS platform available as mobile app and online version has nearly 200,000 registered users with a high engagement index. GoCORP is our online portal for institutional investors, with features that meet corporate investor needs.
What has your experience been handling mergers?
CAMS has extensive experience and track record in managing merger of MFs, merger of schemes. CAMS managed many such mergers including a complex acquisition of a twenty-year-old MF by one of our AMC client, couple of years ago. This complex merger was accomplished over a week end, assuring data integrity, assuring business continuity for AMC and access to funds by the investors.
How do you manage costs in a challenging environment?
All our major cost elements – people, infrastructure and technology are inflation prone. CAMS focuses on technology based automation, process innovations and productivity improvements to manage the cost pressure. CAMS deploys about 4,500 people across 3 delivery centres and has a pan-India network of 272 service centres.
Technology and continuous improvement has helped us deliver end-to-end investor services at a fraction of the cost of that of other investment accounts. For example, we manage the entire life cycle of the investor including access and reach, transaction acceptance and execution, records maintenance, reconciliation / movement of funds, dividends processing, account statement issuance and confirmations, on a platform originated and owned by us. MF RTA (Registrar & Transfer Agent) performs this holistic while in case of secondary market the same is executed by multiple agencies viz stock exchange, depository, depository participant (DP), broker, clearing house and RTA resulting in a high cost account maintenance compared to MF.
Is it possible to throw some light on innovative technology enablers?
CAMS has believed in investing ahead of business needs with the premise that availability and access will lead to category growth. RTAs have been the face of MF industry in most of the towns in India. While a typically large AMC might have presence in 80 to 100 locations, we have presence in about 272 locations. In parallel, CAMS pioneered an electronic platform called FundsNet for IFAs.
In 2014, CAMS launched a suite of digital solutions “Anytime Anywhere Mutual Funds” for 2G/3G enabled devices that can be used by mutual fund sales persons, myCAMS for individual investors and GoCORP for institutional investors. Our app for distributors will be launched soon.