The Hindu Business Line : ‘Brokers of all categories are emerging in great numbers’

Reliance Money will not be true to just a single label or two, Mr Sudip Bandyopadhyay, Director & CEO, tells Business Line. “We will not be wedded to a solitary product manufacturer, be it a mutual fund or an insurer. Customers need a wide basket before them”, he said.

Excerpts.

There are plenty of brokers and distributors these days. How do you react to the view that the market is not big enough or is not expanding fast enough for so many of them?

This is a myth of sorts, especially when you consider the sheer dynamics of the space that is being talked about. India, do remember, has a size that is almost unmatched. Consider the many small centers, some of them mere dots on the map, which are coming to the fore. Think of the incredibly under-serviced sections, peopled by those who have for decades just contended with small savings options, typically postal savings schemes. But it is true that brokers of all categories are emerging in great numbers. The market has made room for them.

So, what will determine their expansion plans?

Going by the very look of the current investment landscape, I can tell you that the number of investors has not changed much in recent years. Given the demat accounts that are now active, this number is less than 6 million. This is after the recent bout of freezing of demat accounts. For our 100 crore-plus people, this is an insignificant fraction. We have, after all, more than 30 crore bank accounts. The gap is enormous. This will essentially drive all our expansion strategies. In terms of covering the market, we have done about half of it. By the close of this year, we will do more.

But the metros account for an overwhelming share of the market. There the competition will be far stronger, right?

Yes. The chase for the customer’s mind is quite different in the large cities. There, a formidable posse of players compete with one another. But the essence of our strategy remains the same here too. The idea is to offer a substantial basket of products. And we can do it, thanks to relationships we have built with our partners.

For instance, if a customer needs insurance, we can offer him or her products engendered by several insurance companies with which we have an association. In the rural segment, we do this with a few basic products. For instance, we give a customer a simple term cover and then, may be, we talk about crop or cattle insurance. But we are not wedded to a particular insurer. As for the other end of the spectrum – the targets here are the wealthier quarters – we are working on a few proposals. I can refer to wealth management services that we have recently started to offer.

What will differentiate broking services in the days ahead?

Technology may well be a great leveller. Also, getting a wider national footprint will be important. Customers, we feel, will need more opportunities to trade, irrespective of the location they are in. The concept of a ‘shop-in-shop’ – which we have tried to work out, courtesy our tie-ups with outfits like Barista – is therefore expected to help a lot. We have started to leverage the Reliance Web World network too. The other major strategy that we have followed stems from removal of brokerage. This is different from what others do.

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