Outsourcing fever grips mutual fund agencies

It seems that outsourcing fever is making a firm grip on all verticals and
BFSI is contributing the most to it. The latest to join this bandwagon is mutual
fund players. These players have started outsourcing functions like back-end
accounting and mana-ging depository acco-unts to foreign players like JP Morgan
and Deutsche bank.

Birla Mutual Fund has recently tied up with Deutsche Bank for managing its
portfolio advisory services. JP Morgan is managing its backend accounting work.
The company in turn is benefited with huge cost savings and customer
satisfaction. Though the company has not disclosed the outsourcing deal size, it
is expected to be one of the large orders placed by a mutual fund agency.

Like Birla Mutual Fund, other large fund houses like ICICI Mutual Fund,
Reliance and other institutions like Templeton too are also contemplating
outsourcing their various functions. ABN Amro Mutual Fund has already outsourced
almost all its backend work.

Experts feel that it is helping fund companies in concentrating on their core
businesses thereby managing time allocation pro-perly. The operati-onal cost is
going down substantially and companies are getting good work at cheaper rates.
As outsourcing in this segment has started happening, costs of mutual funds
investments is bound to gradually decline in the coming years.

It's not that the mutual fund agencies are getting better work at cheaper
rates but also the technology advancement that these foreign players bring in,
would eventually help the employees and customers in making service levels
better. (CyberMedia News)

Rahul Gupta

Mumbai