How Tech-Powered Unified Account Opening (UAO) Is Transforming the Mutual Fund Industry

Among the slightly higher risk-higher return investment options, mutual funds are one of the safest. They allow individuals to pool money with other investors so that the resultant fund can be managed by investment professionals. There is a range of options — both in terms of which securities to invest in  (stocks, bonds, money markets, etc) as well as risk-return profiles. 

Mutual Funds in India have come a long way since the UTI was established way back in the 1960s. In recent years, the traditional domination of the banking sector is yielding to make room for non-banking intermediaries like mutual funds. In fact, the mutual fund industry has become one of the most competitive segments of India’s financial sector. The Assets Under Management (AUM) of Mutual Funds has grown at a CAGR (Compounded Annual Growth Rate of 25% in 5 years (2013-2018), whereas bank deposits of commercial banks have grown only at 11% during that same period. 

There are two main reasons for this exponential increase:

  1. A shift in the saving pattern whereby people have a higher risk appetite and are looking to grow their money instead of just saving it at a lower rate of return. 
  2. More tech-enabled processes which have lowered the barrier to entry when it comes to investing in mutual funds. 

When it comes to tech-enabled processes, account opening is a big one. Until recently, opening an account for mutual fund investing was a long and arduous process. From filling out, collecting and submitting (or couriering) several forms to in-person verification to a long waiting period before you could actually start investing.  

Today, DIY (Do it Yourself) Account Opening software has changed all of that. Products like Celusion’s Unified Account Opening (UAO) platform, allow investors to open accounts and begin investing in mutual funds almost instantly. What’s more, mutual fund aggregators and brokerage firms don’t need to build proprietary account opening software anymore — they can simply buy an off-the-shelf solution that can be implemented swiftly.

Here are just some of the ways in which Unified Account Opening is transforming the mutual fund industry:

Instant account opening with one smart form

Customers can open their account with just one smart form. It uses technologies like OCR (built on Deep Learning and Artificial Intelligence) to auto-populate details from document images with a whopping 99.5% accuracy. 

Ease of KYC (Know Your Customer) Verification

The software uses a KYC API that fetches details from KYC registries or from an organization’s CIS (Customer Information System). What’s more, you can complete the KYC process in a number of different ways — Aadhaar Online e-KYC, Aadhaar Offline e-KYC, KRA, Digital KYC, Central KYC, and Video KYC. 

Webcam-enabled IPV (In-Person Verification)

Using a set of advanced technologies like AI-powered face match, the in-person verification process can now happen over Webcam. This automatically reduces the time and inconvenience involved in opening an investment account. 

Online payments

The UAO technology also accepts online payments — from account opening fees to annual charges to the initial margin. This way the customer can start investing almost immediately.

People’s mindset has shifted towards high-growth investments like mutual funds in a big way. And this has been complemented by the growth  of Unified Account Opening which has allowed retail investors to adopt mutual funding investing in a big way.