Story in Charts
The following are the insights from Mr. Nilesh Shah, MD Kotak AMC; Mr. Vijay Chandok, MD & CEO ICICI Securities., Mr. Dinesh Thakkar, CMD Angel One and Mr. Nehal Vora, MD & CEO CDSL, as a part of CEO Track at AGIC.
Customer acquisition costs and building scale are key challenges
- The cost of acquisition for a SIP customer is recovered in 5-6 years.
- However, an association between players (Stock brokers, AMCs, Insurance companies) can bring this down considerably.
- While the customer base has been scaling up, players will have to engage, retain, and monetize the entire customer base.
Large opportunities unfolding in the Indian equity markets
- Over the next 3-5 years, about 80-100m customers can be added in both direct equity and MFs. The growth witnessed over the past 3-4 years is structural in nature.
A lot has been done by regulators but a lot more can be done
- Enabling measures to get EPF funds into equity markets, implementing a scheme for MF accounts akin to JanDhan bank account
- Ease of regulations for NRIs wanting to invest in India, unfolding a large opportunity.
- Gift city holds a lot of promise as it is the gateway for foreign inflows into Indian markets and investments into foreign countries by Indians. Enabling smoother regulations will be key to unlock the large potential.
- Account Aggregator (AA) framework will enhance the growth of distribution of assets materially as the flow of information will become seamless and will allow financial planners to avoid mis-selling. Interplay of financial institutions will provide financial inclusion opportunities.