MF transactions' digital juggernaut rolls on as investors shift online

Major fund houses report a sharp rise in online transactions, driven by changing investor habits, distributor behaviour, and fast-growing fintech platforms

Filling up physical forms, visiting mutual fund (MF) offices, and calling on other offline means of investing have increasingly become the domain of a smaller set of investors at many large MFs, compared to 12-13 years ago when it accounted for the majority of transactions. 

HDFC Asset Management Company share of electronic transactions rose to 96 per cent for September 2025 from 93 per cent a year ago. Nippon India’s September 2025 investor presentation puts the half-yearly share of digital transactions at 75 per cent from 70 per cent in September 2024, and 56 per cent a year earlier. Quarterly online gross sales as a percentage of total gross sales in UTI Mutual Fund dipped to 89.52 per cent from 94.4 per cent in the same period of 2024. But sales through digital platforms for hybrid and equity schemes rose to 41.27 per cent from 37.61 per cent earlier. 

Every asset manager may define paperless transactions differently, and the numbers may not be comparable across fund houses. But they can be considered broadly indicative of the trend. Saugata Chatterjee, president and chief business officer at Nippon India Mutual Fund, suggested that some of the growth in digital transactions is not only attributed to changing customer  behaviour but also to changes in the behaviour of distributors and other intermediaries. 

In addition to traditional distributors, sub-brokers now also rely significantly on technology and the exchange platform for their transactions while asset management companies (AMCs) invest in mobile apps, which see continuous innovation to reduce friction and make it easy for customers to do transactions. Online sources of transactions also formed a part of the latest quarterly earnings calls. 

“Over the last couple of years, we have seen significant growth in fintech as a distribution channel. They have emerged as a vital channel for the mutual fund industry. If you look at the last six months or so, they have registered 15 million SIPs (systematic investment plans),” said HDFC Asset Management Company managing director and chief executive officer (MD&CEO) Navneet Munot in an earnings call with analysts. 

“So, what we are seeing at this point of time is that a significant number of these digital platforms are starting to rethink what their approach to business should be in terms of how they want to position themselves… we need to have best-in-class digital assets and digital visibility because otherwise you will not be part of the consideration,” said UTI MD&CEO-designate Vetri Subramaniam in an analysts call. 

Digital may account for smaller ticket-size investments, an Association of Mutual Funds in India (Amfi) report showed. While digital accounted for 60 per cent of transactions, it was only 21 per cent in value terms. 

Around 45 per cent of transactions were digital in FY13, which accounted for 1 per cent of transaction value. Many high net worth individuals prefer the physical process, according to Nippon’s Chatterjee. This has meant that 70-75 per cent of the value are still through physical means.