Going with the trend set by other digital payment biggies like Paytm and GooglePay, Bangalore-headquarterd financial technology company PhonePe is also preparing to enter the wealth management space and start offering mutual funds (MF) and other financial products. Founded in December 2015, the company was acquired by Flipkart in April 2016. In August 2016, the company partnered with Yes Bank to provide an online payment system based on Unified Payments Interface (UPI), which is a new process in electronic funds transfer launched by the National Payments Corporation of India (NPCI). The company is now planning to offer financial services in a big way and has already started offering digital gold and tax-saving solutions.
“Financial services will be one of the key pillars of our business. We intend to go deep in understanding the customer’s needs and come up with the right solutions in this space. Hence it would be important for us to interact directly with our customers and build the wealth management platform ourselves,” said Terence Lucien – Head of Mutual Funds – PhonePe, in an email interview with Financial Express Online.
Although it is very easy to invest directly in MFs and other products directly through mobile apps, but one must remain careful, because a novice investor, who doesn’t have knowledge of the products and the risks associated with them, may end up loosing money. So, it is always better to take professional advice before starting investment, especially in the equity segment.
According to Lucien, PhonePe is also planning to provide personalised solution to make things easy for the customers. Following is the excerpt of the interview with him:
1. What is PhonePe’s overall objective in foraying into the wealth management space?
We started with the vision to solve for a customer’s payment and financial needs in four phases – send, spend, manage and grow. As a first step in our journey, we were the first non-banking app to launch on UPI and focused on creating features which enables users to send money. We then solved for spend money i.e. enabling great use cases for customers to spend inside the PhonePe app, partnering with large online / offline merchants and driving acceptance with millions of small stores across the country. Now we are at a stage where our customers love the app, the experience we provided and the use cases we have innovated with. There is a great amount of trust our users have on the PhonePe app and we feel it’s the right time for us to start helping them manage and grow their money, starting with Digital Gold we launched last year and the Tax saving solution that we have recently launched.
2. What are the key USPs of the new offering?
Our main USP is that we have made the entire process of tax saving simple and convenient for our users. They can complete the entire transaction process in a few simple steps. We also have the additional feature where we have a completely digital KYC process for customers who have not completed their KYC.
3. What are the key services to be offered by PhonePe in the wealth management category?
Our first offering in the wealth management category was the gold savings solution which was launched in December 2017. The Tax Saving Fund is the second solution we are providing in this category. Here we have partnered with Aditya Birla AMC and ICICI Prudential AMC. Through this solution customers can save up to Rs. 46,800 in tax under Section 80C of the Income Tax Act.
4. How do you plan to expand this category? What are your future plans?
We are working on multiple solutions which will be launched through the year. Our key objective will be to launch simple, yet powerful, personal finance solutions that help customers fulfil their life goals and aspirations.
5. What are the current trends you see in the wealth management sector in India and how do you plan to leverage or ride on the existing trends?
Till a few years back, access to top-quality Wealth Management services was limited to a small section of the Indian population. Fintech players are expanding the boundaries of the traditional wealth management industry with innovative solutions that will be available to millions of Indians. For example, the entire MF industry has about 20 million customers, whereas at PhonePe we have about 150 million registered users. So there is enormous potential for enabling millions of Indians, to participate in, and benefit from, the country’s growth story. With increased personalisation and omni-channel experiences, we are looking to tap into every market and provide our users with personalised solutions with the added benefit of easy and hassle free transactions.
6. Do you see any shift in trends in the near future?
With the increasing adoption of technology, the number of Indians who will be able to access wealth management services will grow at a strong pace. Consequently, Wealth Management firms will be open to partnering with Fintech players to offer solutions at a lower cost and to create additional use cases. To reach out to the masses, Wealth Managers will have to simplify their solutions, and, in many cases, may also have to think about how these solutions are accessed by customers. For example, a mobile first mode of providing services through which customers can access the services at their ease – anytime and from anywhere.