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 managing depository accounts to foreign players like JP Morgan
and Deutsche bank.

Birla Mutual Fund has recently tied up with Deutsche Bank for managing its
por-tfolio advisory servi-ces. JP Morgan is managing its back-end account-ing
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 hou-ses like ICICI Mutual Fund,
Reliance and other institutions like Templeton too are also contem-plating
outsourcing their various functions. ABN Amro Mutual Fund has already outsourced
alm-ost all its back-end work.

Experts feel that it is helping fund companies in concentrating on their core
businesses thereby managing time alloca-tion properly. The opera-tional cost is
going down substantially and compa-nies 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. (CyberMedia News)

Rahul Gupta

Mumbai