The growth of the R&T business is directly linked to the growth of AMCs, believes Shridhar Iyer, CEO, Sundaram BNP Paribas Fund Services, a recent entrant into the R&T (registrar and transfer agent) space. In an interview with Ashley Coutinho, he says the company can help asset managers to expand into tier-2 and tier-3 cities. Edited excerpts:
You started the R&T business in 2010. What has been the progress so far?
Over the last three years, Sundaram BNP Paribas Fund Services has on-boarded two fund houses and it currently services over 1.8 million investors and 34,000-35,000 distributors across 141 cities in India. The company is the only R&T with a ISAE 3401 Type 1 Certification, which assures customers effective and efficient internal controls related to financial, information and security reporting.
Do you see competition in the R&T space intensifying in the days ahead?
More competition brings in more innovation, and innovation takes the industry to the next level. Less than 8% of households in India currently invest in mutual funds. We should have at least 4-5 R&Ts servicing the industry so that there are no oligopolistic conditions and investors and small asset management companies (AMCs) get the attention they deserve.
In 2010, Sundaram Finance and BNP Paribas Securities Services had planned to invest R60 crore in fund services over a three-year period. How much are you planning to invest in 2013 and 2014?
The commitment of both the partners to developing this business has been ? and continues to be ? strong. We have invested heavily in technology and infrastructure, and we will continue to invest in building our product capabilities.
The R&T market is currently dominated by two large entrenched players. How do you expect to compete with them?
Technology, domain expertise and pricing are tickets to entering the race. We have ensured that all our operations staff are NISM-certified, so they process with full understanding of the business, which helps guarantee the accuracy rates of processing. Strong metrics of performance and transparent reviews have helped our clients cut down costs substantially. Our investment in a high-end call centre helps us track and monitor the response quality and engagement with customers on a real-time basis. Also, we are the only R&T offering the full spectrum of products, including a transfer agency and fund accounting and custody with the support of BNP Paribas.
How do you see the R&T business growing over the coming years?
The growth of our business is directly linked to the growth of AMCs, which, in turn, needs participation from retail customers. The demographics of this country favour a product like a mutual fund, and we would like to work with asset managers to convert this growth into measurable success.