Cybersecurity issues are the biggest concern for the mutual fund industry as the reliance on technology rises, said Nitin 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. When asked about his wishlist from the regulator, Kamath said efforts could be made to make it easier for non-resident Indians (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 software in the asset management company (AMC) business, unlike in broking. Kamath added that the mutual fund industry’s growth is robust, and the outlook will hinge on the market trajectory.
“If markets do well, the mutual fund industry will grow faster,” said Kamath.
Discussing the evolving nature of cybersecurity risks in the mutual fund industry, Anuj Kumar, managing director of Computer Age Management Services (CAMS), noted that the majority of mutual fund 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 hacks the phone in some manner, they have 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 not 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 their mutual fund distributor before making investment choices feel included.”
Shah 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.”
First Published: Aug 29 2024 | 4:40 PM IST
