The challenge

Computer Age Management Services (CAMS) oversees the complete lifecycle of approximately 60 million mutual fund investment accounts for asset management companies (AMC). Handling a large volume of electronic disbursements and systemic periodical collections is thereby a critical component of the company’s daily operations, and accuracy is imperative.

However, when the industry regulator introduced mandatory bank account number validation, it significantly increased the complexity of operations. The new rule aimed to ensure that all payouts and redemption amounts reached the correct bank accounts.

Given the large volume of existing investor account numbers, and the continuous addition of new investor account numbers to the database, CAMS sought a hassle-free solution that promised precision and speed.

The solution

To tackle the challenge, CAMS employed the Immediate Payment Service (IMPS) of the National Payments Corporation of India’s (NPCI) platform. The company was able to facilitate real-time bank account number validation and payments, by leveraging its banking partner’s corporate and treasury APIs. Moreover, the file-level debit for bulk API ensured hassle-free validation. Since CAMS developed a range of suitable add-ons to the existing platform, the project was able to go live within a short time span.

Best practice and innovation

The IMPS-based beneficiary validation solution helped CAMS garner additional business from its core clients – the AMCs. This value-added service helped the AMCs update their database (which in some cases was over 30 years old) with the correct bank details of the investors. Consequently, it helped the asset management companies make payments accurately, reduce rework and follow-ups, as well as save on transaction costs.

The same service is also used by non-banking finance companies (NBFCs) to verify borrower details before disbursement in near real-time. The impact has been a better customer experience and faster disbursements for NBFCs.

This particular solution will also be rolled out to insurance companies who have long-term policy payments to make.

CAMS’s NACH aggregation platform handles around half a million NACH mandates and their monthly volume of eight million collection transactions are triggered electronically. The company needed another banking partner who could manage the workload and, at the same time, provide it with the required information in a timely manner.

While CAMS uses multiple banks for this service, HSBC’s ability to work out a customised solution of crediting clients directly, instead of the CAMS account, helped the company win new business from a leading NBFC. This option has further opened up new avenues of winning business from new industries segments.

Key benefits

• Enhanced investor database: CAMS’s client AMCs can now update existing databases with current bank details of their customers.
• Improved cost efficiency: accurate bank account details enabled CAMS’s clients to make correct payments, minimise rework and save on transaction costs.
• Reduced activation time: the time required to activate portfolios dropped from a few days to a few hours.
• Expanded scope of applications: following the success of CAMS’s IMPS-based solution for AMCs, the company discovered that it also enabled faster disbursements and augmented customer experience for NBFCs. Moreover, it could also be used by insurance companies to process seamless payments to long-term policy holders.
• Improved TAT: the scan-based mandate processing minimised turnaround time by up to five days.
• Straight through processing: seamless processing between CAMS and the banks improved both time and cost efficiency.