Addressing the annual seminar on MFs organised by UTI, UTI Institute of Capital Markets and the Association of Mutual Funds in India (AMFI), Mr Subramanyam said new technology is fast emerging in the world and the MF industry cannot be left far behind. In this regard, the Internet is fast emerging as a good medium for offering various services to the investors.

Earlier, in a technical session on the use of technology in the industry, UTI executive director BS Pandit said UTI was planning to offer a slew of services to its investors through ATMs, touch-screens and Internet.

In the first phase of active technology drive, UTI is using touch-screen kiosks at its various outlets to provide details about its schemes.

Mr Pandit said "these kiosks would be tested in the two-three outlets before we promote it on a large scale". After the successfully implementing the kiosks, UTI will start offering the buying and selling of units of the fund through these kiosks.

In addition, the fund is also looking at selling of the schemes through Internet and ATMs, for which it is talking to various banks.

However, Mr Basu said "buying and selling of units through the ATMs is a complex issue as it involved high level of connectivty among the various branches of UTI and the banks"

Sale of units through ATMs is a common practice in developed countries and helps mutual funds to ensure better services. He said UTI has already started offering the facility of downloading the forms from its website and buy the schemes. But he said until the payment gateways are functional it would not be possible to do the financial transaction on the net. In addition, there is need for investor awareness about payment on the Net.

Most of these services are being planned to be offered in the next 12 months, he said. Highlighting the advantages of active use of technology in the industry, he said technology helps in effective and on-going communications with unit-holders.

Technology through e-finance and Internet can reduce distribution and transaction costs, speed up document processing online, provide instantaneous access to information and enable switch-over in investment decisions.

"This in turn can dramatically improve efficiency and decrease the cost of back-office paraphernalia," he said.

In addition online investments in the funds and other financial assets is likely to grow manifold in the next few years. Mr Basu felt that such financial tasks like checking balances, paying application amount and transferring funds should be cheap and hassle-free. Apart from the issuers of the schemes, the intermediaries in the fund industry have to be active in the use of technology. There are a number of intermediaries like Computer Age Management Services providing services to unit-holders. Similarly the changing technology would also change the distribution channel. However, Mr Basu said it is not possible to completely ignore the brick and mortar medium in the fund industry.

"Technology needs to be supplemented with brick and mortar industry to offer the best services to investors," he said adding that it is the click and mortar industry which spurs growth of the industry.

In addition, many products and services in the industry would not be possible without the advances in computer technology. As the number and sophistication of investors in mutual funds have increased, investors desire different types of funds and pricing structures.

Mutual funds in USA are increasingly use computer technologies to develop new products and services to satisfy those demands.