In recent months and years, fintechs have played a big role in the expansion of mutual funds in India. These platforms have ventured into the untapped sections of the investing community, and returning with small-ticket SIPs in large volumes. With the use of technology, fintechs have simplified the process, encouraging investors with limited budgets to explore mutual funds.
Fintech is short for financial technology. Fintech companies use technology as their key driver to deliver various types of financial services. A fintech can be engaged in digital banking, insurance, lending, stock trading, investment platform services, etc.
The Association of Mutual Funds in India (AMFI) reported that 1.3 million of the 3 million new SIPs created during November 2023 were through fintech platforms. Notably, the SIP amount initiated through leading fintech platforms was between ₹1,500 and ₹2,500, as against an average of ₹5,000 through traditional platforms.
Mutual fund investments can be in the form of direct plans, i.e., direct investments without any agent or intermediary. Or it can be a regular plan where the intermediary offers advisory services and gets remuneration. Fintechs are promoting investments in mutual fund direct plans through the use of online platforms
The online direct mode of mutual fund investment now accounts for nearly 40% of the new investor growth in India. In the last six years, fintech-generated mutual fund investments have outraced the traditional investment model, which has been in the market for more than two decades!
The growing popularity of fintech-driven mutual fund investments is down to several reasons. The ease and convenience of investment are certainly prominent among them. Fintechs have simplified all aspects of mutual fund investments, making it easy to identify schemes, invest in them and liquidate when needed.
Fintechs have made a quick, hassle-free and digital account opening process the norm in the industry. These platforms provide round-the-clock multi-channel customer support, along with integrated learning and educational material about mutual funds and investments. Once your account is open, you can browse through hundreds of fund schemes offered by dozens of AMCs, all in one platform.
Opening and maintaining SIPs has been made very simple through fintechs. All you need to do is provide your KYC details, select the mutual fund and finalise the investment date, amount and frequency. Here’s how it works –
Fintechs have transformed the way mutual fund investments are made. Now you can invest at any time and from anywhere. This means that busy professionals and business owners can create and manage SIPs without disrupting their schedules. Besides, financial discipline is easier for you, thanks to the convenience that fintechs offer.
https://economictimes.indiatimes.com/tech/technology/fintechs-add-1-3-million-new-mutual-fund-sips-in-november/articleshow/106494453.cms?from=mdr
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