Wealthtech_Ruchin Goyal.pptx 0
WEALTH TECH & ROBOADVISORY
Ruchin Goyal Partner and Director, BCG
1st March 2017
Wealthtech_Ruchin Goyal.pptx 1
Note: Data for 2015, Bank deposits includes CASA + Term deposits Source: Sebi MF Opportunities report, BCG Global Asset Management, BCG Analysis
India is underpenetrated in MF industry
0
50
100
India
8%
Japan
87%
20%
UK
57%
Europe
87%
US
AuM / GDP (%)
0
50
100
150
India
15%
Japan
18%
UK
71%
Europe
75%
US
139%
AuM / Bank Deposits (%)
53 37 10 4 33 GDP /
Capita ($k)
Significant growth opportunity in India as economy matures going forward
Wealthtech_Ruchin Goyal.pptx 2
Indian asset management industry in breakout phase
1,693
587505
79
+4% +45%
Dec-16 Mar-12 Mar-08 Mar-03
+25% Formative
Slowdown
Breakout Average AuM (INR '000 Cr)
Note: For 2020, USD 1 = INR 68 taken as conversion rate Source: AMFI, BCG Analysis, CAMS serviced funds data
Indian asset management
industry in high growth phase..
...Few trends shaping the
industry going forward
"With growing retail participation, low interest rates, digitization and introduction of new
products, the mutual fund (MF) industry is expecting to double its assets under management
(AUM) to Rs 35 L crore over the next five years.." – Business Standard, Jan 2017
AMCs leveraging technology to create
new digital propositions
Exponential growth in digital users
driving direct retail sales
Significant untapped potential in B-15
cities
Growing HNI base and share of wallet
New regulations challenging traditional
business models
Wealthtech_Ruchin Goyal.pptx 3
Digital sales has seen breakout growth in the last few years
404
150
115
FY17 YTD FY16 FY15
+87%
CAGR by asset class : Cash : 256%, Equity : 40%, Debt : 42%; One cash transaction of 1.7 L crore has been excluded in FY17 Source: Digital sales data from CAMS
"Digital is the way forward for all
transactions and we see it having
positive impact on mutual fund."
- RMF CEO Sandeep, Dec 2016
"Trend going forward… certain segments
of investors will make direct purchases,
just like they are making direct purchase
of cinema tickets… and buying products
online"
- U.K. Sinha, Nov 16
Gross Digital Sales (INR '000 Cr)
Wealthtech_Ruchin Goyal.pptx 4
Digital has been used across the mutual fund value chain to enhance customer experience
Sourcing On-boarding Advisory Transaction & Servicing
Aadhaar based
e-KYC
Replacing in-person
verification for KYC through
webcam - Wealthy
Birla – One swipe
transaction
Direct to payment page
with pre-filled form
from call center
Gamified
aspiration setting
(Dil Ke Ameer)
Intelligent
portfolio mgmt
Robo advisory
Wealthtech_Ruchin Goyal.pptx 5
Birla Active Account has taken the industry by storm owing to its ease of use & effectiveness
Very simple to use app. Can invest in MFs in a jiffy, is
a good gateway to investments
Invested my deposited money in 1 minute, and
added security ensures peace of mind
Quick registration. Smooth transactions. Great UI
So easy to get better returns from your idle money,
whenever you want to, hassle free as well 315k current downloads (as of Jan end, since Nov start)
Wealthtech_Ruchin Goyal.pptx 6
Capitalizing on this digital growth, several types of players have emerged in this segment
Digital advisor/ Intelligent
portfolio mgmt
Yu'e Bao
Robo
advisory
Online investment
channel
Source: Press search, BCG Analysis
Wealthtech_Ruchin Goyal.pptx 7
Digital value propositions to differ by customer segments
Mass Aspirers (untapped market)
Lower cost to serve
via e2e digital
solution
Mass Affluent
High quality and
customized advice
delivered digitally
Active traders
Dynamic advise and
low cost of
transactions
High Net-worth Individuals
Digital RM and self
service tools
Wealthtech_Ruchin Goyal.pptx 8
Globally, significant funding going into machine learning and robotic automations startups
0
700
1,400
2,100
2,800 +340%
2020
2,200
2019
1,500
2018
900
2017
500
AuM ($B) "New money"
From existing portfolios
1.21.0
0.60.4
0.00
0.45
0.90
1.35
1.80
2013 2012
Start up Funding ($B)
+200%
2015 2014
Significant funding inflows
globally into machine learning &
robotic automation..
..with over 300% growth expected
in AuM managed by robo advising
Source: Reuters, Gartner, Venture Scanner, Press search
“In India, Out of 39 fintech companies, ~10 have
announced receiving funding in robo advisory
domain with FundsIndia ($15.4M), MyUniverse
($9,7M) and Scripbox ($3.2M).." – Groww, Nov'16
“Pure transaction-based distributors who are
thriving on facilitating convenience will face heat
when robo advisers become popular and more
accessible..” – Sadique N, Network FP
Wealthtech_Ruchin Goyal.pptx 9
Points for discussion
Are we ready? Customers, AMCs, Distributors
Which model will work better? Fully online automatic asset allocation, advisory, human assist
What are the implications for different
stakeholders? Distributors, AMCs, Wealth tech & robo advisories, regulators etc..
What role can digital play for different customer
segments? HNI, Mass affluent, Mass aspirers