Podcast 9th October 2015
A glace at the industries that have been disrupted by technology recently will reveal that the disrupted industries were largely consumer unfriendly. Consumers want everything at their fingertips at the cheapest price possible, if the goods and services are largely commoditized. Hence right from taking a taxi to shopping to bank transactions, firms that offered the consumer a touch of the screen on the mobile displaced firms that did not offer the same.
User flow is the one single theme that is propagated for all businesses at present. The user is placed at the center of the universe for all businesses and the user dictates the survival and growth of the business. All of you see this happening every day, embracing the best experience and throwing out the not so good ones.
Mutual funds in India serve the requirements of an investor who is saving his or her hard earned money for a secure, financial future. The industry is Rs 14 trillion in size and is growing fast. Unfortunately the user experience (read investor) is nowhere compared to many of the other services on offer.
Let us take an example of Ravi who is a hard working professional and wants to save for his and his family’s financial future. Ravi does everything online from shopping to transacting in equities. He knows the cost of each product that he buys or each service that he uses online. However when trying to invest in a mutual fund product, Ravi is lost.
Ravi wants to directly invest in a mutual fund scheme online. He first wants to know the cost he is going to incur every year when he invests in a scheme. Mutual funds put out the expense ratios of the schemes on their websites but to get the expense ratio, Ravi has to search for it. The cost of service that should be displayed prominently is not displayed prominently and that is the first area of disruption.
Mutual funds offer similar products. Each mutual fund has many different products under one category. For example Equity will have a host of products as will fixed income. Ravi now has to look over each and every product to determine what he wants. Ravi does not have the time for going through the product that he requires. This is the second area of disruption.
Here comes a disrupter. The disrupter mutual fund, using technology, is able to provide Ravi the product he requires from a limited suite of products by taking in some basic details of Ravi’s requirement. The fund offers the lowest cost for Ravi, as it does not have to pay out commissions. The disrupter fund displays its costs prominently and provides the user the product that he or she requires. The fund will also provide Real Time Portfolios for the investor to check before he or she invests in the product. There are no surprises for the investor. The fund will not charge any load on entry and exit. The fund will also have advisors on call on real time basis if the investor wants to clear any doubts. The rest is as simple as buying a train or plane ticket.
So who will be the Disrupter Fund?
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