BFSI Summit 2026: 'Digital access could widen MF investor base to 200 mn'

At the BFSI Insight Summit 2026, industry leaders said digital platforms, innovative SIP products, investor education and AI tools could help expand India's mutual fund base to 200 million.

India’s mutual fund (MF) investor base could expand to 200 million as digital platforms improve access to investment products, develop solutions for different income groups and strengthen investor education, industry executives said at the Business Standard BFSI Insight Summit.

 

While the number of investors has risen from around 10 million a decade ago to around 65 million now, further growth will depend on rising household incomes, product innovation and the industry’s ability to build investor confidence during periods of subdued market returns, they said.

 

Nilesh Naik, head of PhonePe Invest, said the industry needed to look beyond regulatory changes and focus on products that accommodate different income patterns and make investing more convenient.

 

 

On the 200 million mark, Naik said: “I don’t think 200 million is unachievable.” He added that the industry needs to think of features and products that can appeal to a wider customer base, including those whose earnings do not follow a regular monthly cycle.

 

Naik then cited systematic investment plans as a feature that had helped expand participation by reducing the need for investors to repeatedly decide how much and when to invest. PhonePe introduced a daily SIP feature to cater to self-employed individuals and workers with daily cash flows, acquiring nearly 500,000 customers within six months, he said.

 

Gaurav Rastogi, founder and chief executive officer (CEO) of Kuvera, said India’s relatively low investor penetration needed to be viewed in the context of its per capita income. As the country becomes wealthier, a larger share of the population will have surplus money to invest, creating room for the MF industry to expand. “The next level of growth has to come with the country becoming richer, with the wealth going deeper into the country,” he said.

 

Rajiv Bajaj, chairman and managing director (MD) of Bajaj Capital, said the industry’s next challenge was to maintain investor confidence when market returns were less attractive.

 

Investors often assess mutual funds based on their past performance, making it harder to sustain interest when returns moderate. In such periods, the industry needs to provide greater handholding and reinforce the case for investing beyond traditional bank deposits, he said.

 

Bajaj cited the ‘Mutual Fund Sahi Hai’ campaign as an example of how sustained efforts to build awareness had helped familiarise investors with mutual funds. The next phase of growth, he said, would require further innovation to convert awareness into participation.

 

Swapnil Bhaskar, MD & CEO of JioBlackRock Investment Advisors, said technology could help firms understand customers better, lower costs and make small-ticket investing economically viable. Platforms also need to simplify the investment journey and communicate in regional languages. Technology should complement the work of distributors rather than replace it, he said.

 

“Meet customers where they are,” Bhaskar said.

 

From access to investor outcomes

 

Beyond expanding the investor base, panellists said the industry needed to focus on improving investment outcomes and addressing behavioural challenges that emerge when the market is volatile.

 

Rastogi said the development of India’s financial infrastructure had helped digital platforms scale, although gaps remained. He called for a unified know-your-customer (KYC) framework to reduce friction for investors, noting that separate requirements for banking and investing could be cumbersome.

 

He said the industry’s focus over the past decade had largely been on expanding access. The next phase should place greater emphasis on investor outcomes and the quality of financial advice. “For the last 10 years, we mostly had access to it. Now what we need is the customer outcomes,” Rastogi said.

 

Naik said technology platforms also needed to take greater responsibility for helping investors navigate different stages of their financial lives. Younger investors may initially require relatively simple investment solutions, but their needs change as they start families, take on financial commitments and build larger investment portfolios.

 

He noted that the top 10 per cent of individual mutual fund investors account for nearly 55 per cent of assets held by individuals. The remaining investors, who collectively hold a smaller share of assets, may not always be commercially viable for traditional, high-touch advisory services. Technology platforms therefore need to develop ways to address investor behaviour and provide appropriate assistance at scale, he said. “I think as technology platforms, it’s our responsibility to think about it,” he added.

 

AI as a second opinion

 

Artificial intelligence (AI) is emerging as another tool for investors seeking to evaluate their portfolios and validate financial advice.

 

Bajaj said AI could act as a second opinion, whether an investor first consults a human adviser or uses an AI tool to assess investment options.

 

“Don’t blindly trust anybody,” he said, arguing that investors could use AI to cross-check advice while retaining the ability to hold a human advisor accountable for the recommendations provided. “Tomorrow you cannot hold AI accountable. But you can actually hold your human advisor accountable,” Bajaj said.

 

Bajaj Capital recently launched WealthLens, an AI-based portfolio analysis product. He said it had seen encouraging traction in its initial weeks, with 85 per cent of users coming through direct plans. This suggested that AI-based tools could help the firm reach investors beyond its traditional customer base, he said.

 

Rastogi said market volatility also made investor education more important. Investors who have entered the market during a prolonged period of strong returns may be unprepared for extended phases of weak performance, he said. Showing them how markets have behaved during previous downturns can help them better understand volatility.

 

The panel also discussed the continuing role of traditional distributors as direct investment platforms gain ground.

 

Bajaj said digital platforms were expanding awareness and bringing more investors into the market, creating opportunities for traditional distributors to serve customers who eventually need more comprehensive financial planning. He further described the relationship between digital platforms and traditional distributors as one of cooperation rather than outright competition.

 

Naik, meanwhile, defended PhonePe’s decision to offer regular mutual fund plans, saying first-time retail investors often need assistance and handholding. He said the regular-plan model allowed distributors to provide incidental advice while earning commissions from fund manufacturers.

 

The panellists said investors were willing to pay for financial advice; the challenge for the industry is to show how advice can help investors navigate a

 

complete market cycle and work towards their financial goals, rather than merely recommending individual products. Bhaskar said Indians “are willing to pay as long as they are clear what value they are getting back.”