Changing address is not easy biz with MFs, says McKinsey report

For mutual fund investors, their experience with non-commercial transactions (such as change of address and altering bank details) is more troublesome than rectifying commercial transactions, such as making sure they receive redemption proceeds.

A report by consultancy McKinsey released here at the CII mutual fund summit, said customers of the MF industry are inconvenienced by processing setbacks, such as being rejected for incomplete documentation, errors in data capture and delays in execution of requests.

The industry lags behind other financial services players in adopting technology. For example, over 99 per cent of MF requests are processed through physical submissions compared with banking where 67 per cent of cashless payment transactions are physical.

Non-commercial transactions usually require the submission of additional documents due to their risky nature and different asset managers ask for different documents. Because of this, rejection rates are twice as high in non-commercial transactions and complaints five times as high when compared to commercial transactions.

V Ganesh, CEO, Karvy Computershare, said despite these problems, the complaints to customer base ratio in the MF industry — at roughly 0.6 per cent — is comparable to that of the banking sector.

The report notes that inconsistent investor services arise because of multiple channels that AMCs have developed, such as the branch network, postal mail, call centre, website, SMS and mobile apps. Despite this, there seems to be gaps in information transfer. The report suggests that making customers more aware of the different channels available and shifting them progressively to digital channels will improve the overall quality of service in the industry.

Harshad Chetanwala, Head — Customer Delight, Quantum AMC, said, “With the internet becoming one of the most preferred ways of communication, important and frequently asked questions are featured on AMC websites for investors to proactively reach their AMCs. Also, a lot of investors’ portfolio-related analysis and information is offered online on their respective investment portals to help investors take more informed decisions.”

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