Financial services group Bajaj Finserv entered the highly competitive mutual funds business and has plans to make it big over the next few years, drawing in on the ‘late mover advantage’.
To begin with, the company is launching three schemes in the fixed income, liquid and money market products by the end of the month, and will have four more soon, depending on the regulatory approvals, group chairman and managing director Sanjiv Bajaj told reporters on Tuesday, announcing its entry into the mutual funds’ segment.
The group’s ninth entity Bajaj Finserv Mutual Fund will compete with 40 others in the sector, which together manage as much as Rs 40 lakh crore of public money.
At the launch event, Bajaj also added that the company aims to bring down the value of loans that are pushed through phone calls to less than 10% of its business.
“Our aim would ideally be to bring this business down to 10 percent, and then to zero percent…so that our calls will only be service calls,” said Bajaj.
“All promotional activity will happen through our digital channels; that is where we want to go.”
“You (customers) will have the right to be forgotten, but make sure you never come back for our products and solutions,” Bajaj said.
He added that in three months’ time, Bajaj Finserv’s website and its mobile application will have an option where borrowers and investors and clients can choose to never be “bothered again”.
“We want to give people the right to be forgotten by us,” said Bajaj. When asked whether the fund house’s customers would be besieged with calls from Bajaj Finserv about loans or insurance products, Bajaj said, highlighting that many such calls originate from fake call centres.
“Institutional fraud is a very significant issue where people claim to be our employees and go out to customers. We recently busted a 400-member organised fraud call centre, just outside of Mumbai,” said Bajaj.
Bajaj said that data ought to be mined to only make products available to customers, “rather than proactively calling the customer.”
The mutual fund will implement every norm of data protection and privacy that confirms SEBI’s expectations.
The group, with its existing eight subsidiaries, offers a suite of financial products to close to 70 million customers, and it wants to tap into the same customers for the new business, Bajaj said.
“Yes, we’re a late entrant or you can say the last entrant. But we aren’t worried about that. In fact, we want to tap into the advantages of being the late entrant that places us on a better footing.
“Because this late entry gives us the advantages of knowing what works and what doesn’t work,” Bajaj explained the rationale for the entry at a time when there is an unprecedented level of regulatory scrutiny on the sector.
When asked about growth targets, Bajaj said, “I don’t want to put pressure on the management team by setting an AUM target, as that will only lead to mis-selling and other malpractices. We have enough patience”.
Ruling out foreign equity participation, Bajaj said, we brought in foreign support in insurance because when we entered we knew nothing about that business. But in MF we know pretty well what we want.
The group has 5,000 branches across 3,500 cities now, Bajaj said.
(With PTI inputs)
Comments
0 comment