Mutual Funds Jump On To The Technology Bandwagon

Had it not been for the technological revolution that comprises artificial intelligence and machine learning, investments in mutual funds would have continued to plod on at the speed of a tortoise. But, as of now, it’s like a hare running in full form. From robo-advisors to real-time analytics, the tools available today empower investors to take control of their financial futures. As technology continues to evolve, it will further democratise wealth creation, enabling even more Indians to participate in the mutual fund revolution [EasyDNNnews:PaidContentStart]

Picture this: It’s 2010. Arvind Sanger, a 35-yearold engineer from Ahmedabad, decides to invest in mutual funds. His journey is far from easy—he hops between asset management company offices and banks, fills out mountains of paperwork, and spends hours in queues just to get his KYC (Know Your Customer) done. 

Baffled by brochures filled with complicated financial terms, he depends heavily on his advisor’s guidance—often shelling out commissions for their help. Fast forward to 2023. His 25-yearold niece, Meera Sanger, wants to kickstart her investment journey. 

She downloads and opens an app, completes her e-KYC within minutes using her Aadhaar card, and begins investing in mutual funds through SIPs—all the while enjoying her morning cup of tea. By the time she reaches work, her portfolio is live, and she can check its performance on her phone. The stark contrast between Arvind’s and Meera’s experiences shows how technology has revolutionised investing in India in general, and mutual funds in particular. What used to be a slow and tedious process has now become as easy as ordering groceries online. But it’s more than just convenience—it’s about enabling a new set of investors to confidently take control of their financial future. 

The Technological Transformation The investment landscape in India has undergone a seismic shift over the past decade, driven largely by the rapid adoption of technology. Mutual funds, once considered a complex and inaccessible investment vehicle for the average Indian, have now become a popular choice for millions, thanks to the transformative power of technology. From simplifying the investment process to providing real-time insights, technology is reshaping how Indians approach mutual fund investments. In this article, we explore the key ways in which technology is revolutionising the mutual fund industry in India. 

Democratising Access to Mutual Funds Gone are the days when investing in mutual funds required multiple visits to a financial advisor or an asset management company. Technology has democratised access to mutual funds, making it possible for anyone with a smartphone and internet connection to start investing. Many independent as well as broker-led platforms have emerged as user-friendly portals that allow investors to browse, compare, and invest in mutual funds with just a few clicks. This has opened the doors for first-time investors, especially millennials and Gen Z, who are more comfortable with digital platforms than traditional methods. 

The mutual fund industry has seen accelerated growth in the last five years, with the CAGR almost doubling compared to the long-term average. The remarkable growth of India’s mutual fund industry, particularly in the last five years, can largely be attributed to technological advancements and proactive initiatives by industry bodies. The integration of digital platforms has revolutionised mutual fund investments, making them more accessible and user-friendly. Technologies such as e-KYC (electronic Know Your Customer) have streamlined the onboarding process, allowing investors to commence their investment journey swiftly and securely. 

Additionally, the rise of fintech platforms has democratised investment opportunities, enabling individuals from various socio-economic backgrounds to participate in mutual funds with ease. Complementing such technological strides, the Association of Mutual Funds in India (AMFI) has launched several initiatives to broaden the investor base. The ‘Mutual Funds Sahi Hai’ campaign, initiated in 2017 under the guidance of the Securities and Exchange Board of India (SEBI), has played a pivotal role in dispelling myths and educating the public about mutual fund investments. 

More recently, AMFI has introduced the ‘Chhoti SIP’ initiative, allowing investments as low as ₹250, aimed at encouraging first-time investors and those from the underserved segments to adopt systematic investment plans. Furthermore, the ‘Tarun Yojana’ seeks to integrate financial literacy into school curricula, equipping young minds with foundational knowledge of investment principles. These concerted efforts, combining technological innovation with strategic industry initiatives, have significantly propelled the mutual fund sector’s expansion in India. 

Robo-Advisors: Personalised Investment Guidance Robo-advisors, powered by artificial intelligence (AI) and machine learning (ML), have emerged as a game-changer in the mutual fund space. These digital platforms analyse an investor’s financial goals, risk appetite, and investment horizon to recommend tailored mutual fund portfolios. These platforms use algorithms to provide personalised advice, eliminating the need for expensive human financial advisors. This has made professional investment guidance accessible to a wider audience, including those with limited capital. 

SIPs Made Simple Systematic investment plans (SIPs) have long been a preferred way to invest in mutual funds, allowing investors to contribute small amounts regularly. Technology has made SIPs even more convenient. Investors can now set up and manage their SIPs entirely online, with features like auto-debit, reminders, and the ability to pause or modify plans at any time. Different apps have simplified SIP investments, and encouraged disciplined saving and investing habits among the users. SIPs in India have seen remarkable growth over the past few years, reflecting a significant shift towards disciplined investment habits among the investors. 

As of February 2025, the number of SIP accounts reached approximately 10.16 crore, up from 8.7 crore at the start of the financial year. Monthly SIP contributions have also been hovering around the mark of ₹26,000 crore since December 2024, compared to ₹20,371 crore at the start of the financial year. This consistent increase in SIP inflows has significantly bolstered the mutual fund industry’s assets under management (AUM), which grew from ₹27.23 lakh crore in February 2020 to ₹64.53 lakh crore by February 2025, marking more than a twofold increase over five years. Notably, SIP AUM accounted for around one-fifth of the total mutual fund AUM, underscoring the growing importance of SIPs in the overall mutual fund landscape. 

The chart above illustrates the monthly SIP contributions in India from April 2016 to December 2024, along with the corresponding year-on-year growth in the total annual SIP inflows. The blue line represents a steady and consistent rise in monthly contributions, highlighting increasing retail investor participation over the years. The green bars indicate the yearly growth percentage, showing strong momentum in the initial years and stabilising in recent years. This trend reflects growing investor awareness, confidence in mutual funds, and the power of disciplined investing through SIPs. Most of this has been possible primarily due to the adoption of technologies. 

Real-Time Tracking and Analytics Technology has empowered investors with real-time tracking and advanced analytics. Investors can now monitor their mutual fund portfolios round-the-clock, track performance, and access detailed insights into their investments. Platforms provide tools to analyse fund performance, compare schemes, and make informed decisions. This transparency has increased investor confidence and encouraged more people to participate in mutual fund investments. 

Paperless and Hassle-Free Transactions The introduction of e-KYC, as in the case with Meera above, and paperless onboarding has streamlined the investment process. Investors can now complete their KYC verification online using Aadhaar-based authentication, eliminating the need for physical documentation. Additionally, the rise of digital payment systems like UPI has made it easier to invest in mutual funds seamlessly. This has significantly reduced the time and effort required to start investing. 

Educational Resources and Awareness Technology has played a crucial role in educating investors about mutual funds. Online platforms offer a wealth of resources, including articles, videos, webinars, and tutorials, to help investors understand the basics of mutual funds, risk management, and portfolio diversification. Social media platforms like YouTube and LinkedIn have also become hubs for financial influencers who share insights and tips on mutual fund investing. This has led to a more informed and confident investor base. 

AI-Driven Predictive Analytics AI is being leveraged to predict market trends and optimise mutual fund portfolios. AI-driven tools analyse vast amounts of historical data to identify patterns and provide recommendations for better investment decisions. There are various platforms that use AI to create thematic mutual fund portfolios based on emerging trends that are aligned with a client’s risk profile. This level of sophistication was previously available only to institutional investors. Technology has democratised this. 

Regulatory Support and Innovation The Securities and Exchange Board of India (SEBI) has been proactive in embracing technology to regulate the mutual fund industry. Initiatives like the introduction of blockchain for secure transactions and the use of big data for monitoring fund performance have enhanced transparency and trust in the system. Additionally, SEBI’s push for direct mutual fund plans (which have lower expense ratios than regular plans) has been facilitated by technology, as investors can now easily compare and switch to direct plans online. 

Challenges and the Road Ahead Although technology has certainly revolutionised the mutual fund investing landscape in India, challenges remain. Cybersecurity concerns, digital literacy gaps, and the risk of over-reliance on algorithms are issues that need to be addressed. However, with continued innovation and regulatory support, the future looks promising. The integration of technologies, AI, and big data is expected to further enhance the efficiency and accessibility of mutual fund investments. 

Conclusion Technology has undoubtedly transformed the way Indians invest in mutual funds, making the process more accessible, transparent, and efficient. From robo-advisors to real-time analytics, the tools available today empower investors to take control of their financial futures. As technology continues to evolve, it will further democratise wealth creation, enabling even more Indians to participate in the mutual fund revolution. For investors, the message is clear: embrace technology, stay informed, and make the most of the opportunities it brings to the table. 

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