With dependence on technology rising, cybersecurity issues are the biggest concern for the mutual fund industry, said Nithin Kamath, founder and CEO of Zerodha.
Kamath was speaking at a panel discussion on leveraging technology and innovation for the growth of the mutual fund industry at the Global Fintech Fest here.
When asked about his wishlist from the regulator, Kamath said efforts could be taken to make it easier for NRIs to invest in mutual funds.
On adopting free and open source software (FOSS) in mutual funds, Kamath said it is difficult to use open source in AMC business, unlike broking.
He said the MF industry’s growth is robust, and the outlook will hinge on the market trajectory.
”If markets do well, it will. The MF industry will grow faster,” said Kamath.
Discussing the evolving nature of cybersecurity risks in the MF industry, Anuj Kumar, managing director of Computer Age Management Services (CAMS), noted that the majority of MF product users now access their investments through digital mediums. This shift has led to a change in the nature of security challenges.
“In a lot of systems, the summary of an account is based on PAN and phone number. If somebody has access to your phone and accesses your OTP or hack the phone in some manner, he has taken virtual control of everything,’ said Kumar
Nilesh Shah, managing director of Kotak Mahindra Asset Management Company, said the industry should leverage technology so that those not so digitally savvy are excluded and digital frauds are minimised.
”Everyone is not digitally smart. The system should be such that a young person and a 75-year-old who wants to speak to his mutual fund distributor before he makes his investment choices feel included,” Shah said.
He said WhatsApp groups are being created in the name of fund managers to dupe gullible investors.
“Every other day, we are filing complaints in the cyber cell against impostors. We need to ensure that this digital trapping does not happen,” he said.
First Published: Aug 29 2024 | 4:40 PM IST