BackCan’t shift traditional processes online and expect scale
Rahul Parikh of Aditya Birla Money MyUniverse talks about the evolving trends in the financial services space, investment strategies and the company's outlook
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It has been three years since Aditya Birla Money MyUniverse, an online money management platform, was launched. The company has now introduced a mobile app, Maxit, which is currently in the beta stage. Rahul Parikh, head, Aditya Birla Money MyUniverse, said the app is primarily targeted towards savings by curating relevant offers on spends. The financial space is evolving as people look for ease of transaction, and companies look at using non-traditional data to build credit score. Parikh spoke to Mint about the evolving trends, investment strategies and the company’s outlook.
What financial management trends have you observed with those using MyUniverse?
Though we don’t target a specific group, we have realised that our users are either from the information technology, automobile or e-commerce industries. This person is digitally savvy, and the income group ranges between 5 lakh and 35 lakh, annually. MyUniverse is for the cubiclewala and not the cabinwala. We noticed that people in the 25-35 years age group were more confident and liberal in sharing their credentials as compared with those in the 35-40 years group. When we started personal finance management, many people didn’t understand it. But now, three years later, the understanding of personal finance has grown.
From an investment point of view, it is the 28-38 years age group that has a meaningful surplus amount, is digitally savvy and invests online. It is responsible for over 70% of our investment transactions. In our customer base, we have noticed that most people up to the age of 40 years invest in equity. Within equity, a significant number invest directly in stocks.
People don’t think about money as an overall umbrella concept but in terms of specific needs. When it comes to advisory, simplicity and convenience pays more than sophisticated and complex advice.
Is it difficult to change the way people think about money management?
The concept of financial savings needs to be corrected. Even today, a large chunk of savings is channelised towards deposits. One should look at equity-linked products—though these are riskier than deposits—to beat or keep pace with inflation. In general, this is the idea that we want to promote. We break this idea into three concepts. One, the only magic that works is compounding. Two, for compounding, you need to get the asset allocation right and invest systematically. And three, you should remember that the purpose of investment is to beat inflation. Our thought has always been that better financial management can be achieved if you give a single view of finance, with the right advisory and a convenient way to transact. Through aggregation, we offer a single view option linked to underlying finances. We have a system generated algorithm that provides a basic, personal finance level advisory. Now we are building a transaction platform to ensure that the user can manage end-to-end personal finance on a single digital platform.
In the investment space, we have a mutual fund platform and we will also launch one for direct equity soon. The online customer needs to be dealt with in a different way. You can’t shift the traditional processes online and expect scale. If you want scale, you will have to make it convenient.
What changes have you brought in to make transactions easier?
We have made the know-your-customer (KYC) process paperless; a non-KYC customer can also transact. At present, we allow non-KYC customers to transact so that the flow doesn’t break. We hold the money and give them an appointment to submit documents online. We are allowed to hold the money for three days as per regulations. Once we get the documents, we do a video call and capture her IP (Internet Protocol) address. Through this process, KYC process is completed in an hour. Otherwise, it usually takes at least 48 hours. In case the documents don’t reach within three days, the money is reversed.
We are working on a system in which customers can upload statements. We are also working on SMS-based data analysis. If you have our mobile app, and once we enable the SMS-based data analysis, then you won’t need to give us your credentials. At present, a user has to key in her online banking credentials and have Yodlee, a back-end service provider, to take the data from the back-end and update it on a daily basis. With the SMS-based data analysis, we will be able to read a user’s bank details from SMSs.
Are there any big changes expected in financial services?
In India, the aggregation space is evolving. It initially started with manual entry, which was tedious. Next, companies such as ours came up with the ability of getting data for you from the financial institution itself. The third phase is SMS-based aggregation. While this is not the correct way to get your financials, as it may not be 100% accurate, it is a quick and easy way to aggregate information. Also, adoption of SMS-based aggregation will be higher. And since we have data on spending and investment patterns, we are currently building an engine that allows a much more robust way of building credit reports. We hope that through this credit information, our customers will get better loan products.
You will see a lot more innovation in the credit space, the mobile platform and advisory.
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