In an attempt to attract retail investors, mutual fund houses are using social media platforms such as WhatsApp and other messaging apps to facilitate transactions in mutual fund products.
According to reports, the new facilities will help investors to buy and sell mutual fund products much faster and more easily. Many fund houses are already allowing customers to use their mobile phones to invest, redeem and switch funds and others are planning to adopt digital technology to gain investors.
The Economic Times reports that Indian mutual funds investment company, Quantum MF is currently offering WhatsApp as a facility to transact or view mutual fund portfolios and L&T MF is enabling customers to track their investments on Facebook via their new Goinvest service.
Quantum AMC Head-Customer Delight Harshad Chetanwala told the ET that, "Digitalisation adds a lot of convenience and comfort for investors in today's world. With the increase in the Internet reach and number of smartphones, digitalisation will always be preferred by investors."
"MF houses have been focusing on the online platform for the investors to transact. The idea is to keep it as simple as possible for the investor to invest with the AMCs," said Chetanwala.
In India, the number of internet-enabled mobile phones is predicted to increase from 10-15 million in 2010 to 300-400 million in 2015 and although many fund houses are offering the facilities for online investment, industry experts believe platforms need to be made more user friendly for investors by improving infrastructures and efficiencies.
With the growth of online gaining speed and the preference of the younger generation to carry out many transactions online, the Securities and Exchange Board of India (SEBI) is suggesting the internet should be used as a distribution channel which can help to increase the infiltration of mutual funds among young investors in particular.
SEBI has also set up an expert panel to suggest measures for increasing distribution of mutual fund products through digital channels.