imgbd Think BIG: Business Perspectives

Online platforms discover new client acquisition vehicle

Sanjiv Singhal, ScripBox and C R Chandrashekar, FundsIndia

In a nutshell

Last week, we featured the thoughts and initiatives of two of India's largest distributor platforms - NJ India and Prudent on how they are leveraging Reliance MF's Simply Save proposition with an instant redemption facility (Click Here) as a BIG business driver. This week, we bring you perspectives from two of India's largest online investor platforms - ScripBox and FundsIndia - on how they intend leveraging this smarter savings proposition as a client acquisition vehicle. For every distributor with a growing retail base, there are very useful insights from these business leaders on how you too can harness this BIG growth opportunity.

Sanjiv Singhal, Co-Founder and COO, Scripbox

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At Scripbox, our effort is to simplify investing even as we promote a disciplined approach. We don't try to get investors drawn into comprehensive financial plans, nor do we try to engage them in discussions around asset classes. We break up saving and investing into 4 simple buckets, which we think work well for most investors:

  1. Spending money - money that is available for spending within the next 1-3 months. Liquid funds are recommended for this bucket.

  2. Short term money - money that is being saved for down-payment of a house or to buy a car or bike. Income funds (accrual funds) fit into this bucket.

  3. Long term money - money that can be put away for a few years without any planned drawdown need. Equity funds fit into this bucket.

  4. Tax saving money - this is also a form of long term money as it is invested for a period of 3 or more years. However, most investors treat this separate from other long term money as there is an immediate tax break that is available.

Our experience suggests that when you simplify investing into these 4 intuitively understandable buckets, with no jargon on financial planning and asset allocation, investors tend to understand easily and act quickly and confidently. The more we complicate matters, the more likely that we make investors procrastinate.

We have 4 funds that we recommend within the long term money bucket, 3 for short term, 2 for tax and 1 for cash. That's a total of just 10 funds to cover all 4 buckets. Keeping things simple works with investors.

In the cash bucket, we have an exclusive tie up with Reliance MF, for their Debit Card & instant Redemption functionality. We have integrated the functionality of their Simple Save app into our platform and our app. We call this facility Any Time Cash. It is linked to the Reliance debit card and we are working through the APIs to integrate Reliance's instant redemption facility into our platform.

I believe Any Time Cash can be a powerful new client acquisition vehicle for us. A large proportion of savers continue to associate mutual funds primarily with the stock market. Any Time Cash is a very useful way to demonstrate easy access to your money through mutual funds, and helps dispel the myth that mutual funds are only about stock markets. It's a great way for investors to get started with their journey in mutual funds. You don't have to think too much before getting started with a proposition like Any Time Cash.

Its still very early days for us with Any Time Cash. We soft launched it with existing clients and the response has been very good. We have seen an encouraging number of new clients who are signing up for the Scripbox proposition, with Any Time Cash as their first step. We are now planning more marketing activity around Any Time Cash, to promote it as a useful first step into the investing world.

C.R. Chandrashekar, Co-founder and CEO, FundsIndia

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I think Simply Save from Reliance MF is one of the better innovations we have seen in the fund industry and among the best from a client acquisition perspective. We are seeing that even among corporate executives in the 25-45 age group, despite their generally higher level of awareness, they still maintain fairly substantial idle balances in their savings accounts. A liquid fund with an instant redemption facility along with a debit card becomes a compelling proposition to offer to such investors. There is little or no pain or discomfort for clients to consider making the switch from leaving idle balances in savings accounts, to using a smarter way to save through this proposition.

For online platforms, there is another plus factor. In any financial intermediation service, building trust is a critical success factor. In the offline world, this is done through face-to-face meetings and relationship building. In the online world, this can be a challenge. If however, one commences the relationship with a proposition like this, it helps build the relationship and therefore the trust factor a lot better. For online platforms, this is a wonderful client acquisition vehicle.

Every MF investor is by default a bank customer. And every bank customer has a savings account. Every saver is familiar with what a savings account is. The opportunity to present to these savers a smarter savings proposition is therefore a huge business opportunity.

We are integrating this proposition into our platform and are currently in the midst of beta testing with some clients. We expect to roll this out actively from the first week of November and will be keen on marketing this proposition as a way to bring in new investors into FundsIndia.

The challenge then of course is how to gradually get these investors to become "full-fledged" investors, with investments in debt and equity funds for their diverse financial goals. But, from the perspective of a client acquisition vehicle, I think this proposition is a very exciting one.



Content is created by Wealth Forum and must not be construed as an opinion by Reliance Mutual Fund.



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