Good afternoon everyone and a very warm welcome to a very special Jio BlackRock event. My name is Ramona Arena and I'm absolutely delighted to be your host today. Before we begin, I would just request all of you to check your mobile phones. Make sure that they are on silent, please. And also in case of an emergency, please note the nearest exits in the hall. A very special thank you to all of you who are here with us in Mumbai and to those of you who are tuning in virtually. We are going to have a very interesting set of conversations over the course of the next hour and a half and would love for all of you to join the conversation. So please note the hashtag that you are to use, Jio BlackRock. We look forward to engaging with you and to have you engage with us throughout this afternoon. Jio BlackRock has brought us together to discuss investing for a new era. India has a significant opportunity to build prosperity for people by expanding access to capital markets. Our digital public infrastructure has transformed payments and commerce and is now transforming investing. As markets deepen, financial assets allow households to participate more directly in the country's economic growth. This is the new era of investing for India. The creation of Jio BlackRock, the world's leading asset manager and India's digital champion, Jio through Jio Financial Services. Please join me in welcoming to the stage the MD and CEO of Jio Financial Services, Mr. Hitesh Sethia.
Good afternoon everyone. Thank you for being here today. A warm welcome to Mr. Larry Fink, chairman and CEO of BlackRock. Mr. Mukesh Ambani, chairman and MD Reliance Industries. Mr. K.V. Kamath, chairman Jio Financial Services. Mr. Rob Goldstein, chief operating officer, BlackRock. Miss Rachel Lord, senior MD and head of international at BlackRock and to all our industry leaders present here today. It is indeed a rare honor to be in the company of two global business icons today as we look beyond the horizon to discuss how the evolution of finance will empower India accelerating our collective mission of Viksit Bharat 2047. India's financial service sector has evolved significantly over the last two decades. We began with a fundamental challenge the digital divide. Jio bridged the gap by democratizing access to data. We then moved to a phase of scale where a robust public digital infrastructure such as UPI and account aggregator enabled a transformative pivot in financial services. Yet a striking paradox remains in India. While we lead the world in how we transact primarily through UPI, we are still in the early stages of how we protect and invest. Our penetration in insurance and mutual funds is barely a fraction of the global benchmarks. This gap is our greatest opportunity to convert world-class access into financial empowerment for all. The next phase of financial services is not just about being digital first. It's about being intelligent always where financial systems are designed to anticipate needs, reduce complexity and be hyperpersonalized for each and every individual's unique context. This ladies and gentlemen is the core objective of Jio Financial Services that looks beyond isolated transactions to connect the core financial needs of people. The need to borrow, need to transact, protect and invest. With 20 million users joining us on this journey in just over a year, it is clear that our vision of a unified financial experience deeply resonates with modern Indian consumer. As India's economy expand and household income rise, investing is becoming increasingly central to how Indian households build long-term financial security. The mutual fund industry's assets under management have crossed approximately rupees 80 lakh crores representing a six-fold increase over 10 years and this number is expected to more than double over the next 5 years. And yet when viewed in a global context, India still remains early in this journey with a significant runway for growth. Meeting the shift requires a fundamentally different way of building investment institutions. It means a pivot towards outcome-led product and advisory offerings available on a unified intelligent first platform. It means leveraging the complementary synergies of partners to build at scale like when Jio Financial Services' strong brand and digital reach combines with BlackRock's global expertise in investment and risk management. The ambition is not to make incremental improvement. It is to shape a very new era of investing. One that is globally benchmarked, deeply local and tech enabled. This afternoon is not just about reflecting on the present. It is about reimagining the future. I'm very confident that today's dialogue will set the blueprint for a financial ecosystem that will truly support the vision of Viksit Bharat. Thank you once again for being here. Have a great afternoon. Thank you.
Thank you for those insights, Mr. Sethia. Jio BlackRock is a disruptor and it has already started to show that the ability of this business to play this role of disruptor in the Indian investment management industry is the result of many special ingredients. Basically, one of them is the role of technology as an enabler of access to the financial markets for more and more people around the globe and across India. Another is the extraordinary vision of the two pioneers behind Jio BlackRock whose vision, innovation and entrepreneurial spirit have been the driving force behind this venture. To explore these two topics, we have a very special hour of conversation coming up. First, a discussion between Mr. K.V. Kamath, chairman of Jio Financial Services, a professional with a long and storied career in financial services in India. And Mr. Rob Goldstein, chief operating officer of BlackRock, who joined the firm aged just 20 and who is one of the key architects of BlackRock's fabled technology platform, Aladdin. Following that, we are going to be in for a treat with what will surely be one of the most unique conversations to be hosted in India with Mr. Mukesh Ambani, chairman of Reliance Industries and Mr. Larry Fink, CEO of BlackRock. For our first session. Please join me in welcoming on stage Mr. Kamath and Mr. Goldstein and to interview them the managing editor CNBC TV18, Shereen Bhan.
Good afternoon, ladies and gentlemen. What a pleasure it is to be here to talk to these two absolute stalwarts. And then we've got two more stalwarts coming up after Mr. Ambani and Mr. Fink. It's great to see you both here. Without further ado, let's dive straight into it. I think Hitesh in his opening remarks gave us a very clear indication of where we currently find ourselves as far as the Indian financial sector is concerned especially the opportunity for players like Jio BlackRock and I want to understand from you what you believe will be the levers, the triggers that will lead to this transformation of the current assets under management for the mutual fund industry to double over the next five years.
I think thank you sir, thank you Shereen and good afternoon. We ride on the India story, the India story. We now talk of a 10% growth. I believe that 10% growth is sustainable and my experience in banking shows that if you're growing at 10% financial services business typically grows at 15%. So we should simply compound at 15% and you'll have a doubling of the assets but that's only part of the story. I think there is also going to be reallocation of money from savings to investment. So you can put a number, I don't want to speculate. My belief is the mutual fund industry in India is going to more than double over the next five years given a 10% growth and the shift from money lying in savings account at very low interest rates into investment accounts which give you higher rates.
Well, that's good news for the mutual fund industry. What about banks? They're already complaining about deposit mobilization.
Yeah, we'll talk about banks another day. And I have talked many times about this. I think everybody has to reinvent. So banks also will have to reinvent themselves. But we are talking of this business. Yes. And I think we're talking of our joint venture which has no legacy. I would think what is critical in today's world not just for us but in any business is what's your legacy situation and are you willing to deal with legacy? We are privileged because we have no legacy at all. So we are at the right time at this moment and we will have to keep being at the right time as we grow.
You know Rob, let me pick up on the phrase that Mr. Kamath used. We're at the right time. Are you also at the right place? Of course, the experience with India goes back over 15 years now. Why the belief to want to double down on India at this time?
Well, first it's an honor to be here and it's so exciting to have the opportunity to be here today having launched the asset manager and having launched the wealth management company. If you take a step back when we announced what we were doing here together as Jio BlackRock, the aggregate mutual fund industry was roughly 650 billion. Now it's 900 billion less than three years later. So I think this question of is it going to double, I think it's certainly going to double. The question is how big should it be and if you believe which we strongly do at BlackRock, if you believe that India is going to become the third largest economy in the world I think we'd all agree that the capital markets need to grow. I think we'd all agree that the mutual fund industry needs to be a lot bigger than under a trillion dollars which it is today. So when we look at the opportunity set, we think in many regards it's just beginning. As we think about where India is today in terms of its capital markets, as we think about where India is today in terms of financial services and importantly where it is with regard to wealth and asset management, in many regards it's like what the United States or like the United Kingdom was. If you go back 20, 30 years ago, people are buying mutual funds and they're buying good mutual funds. They're paying very high prices. They're paying high distribution costs and they're sort of collecting funds as opposed to having the opportunity to really understand what am I investing for? what is my outcome that I aspire to and how do you actually build a portfolio with the right building blocks to achieve that outcome and that's what's so exciting to us is that in many regards in India today that space is open the combination of technology that we're able to bring through BlackRock and importantly the distribution reach and brand of Jio bringing those two together enables us to really deliver something unique to the market here.
You know Rob if I can just double down on what you said there and you talked about the headroom for growth here in India. I want to put this in the context of what you're seeing globally today for BlackRock assets under management what 11 trillion at last count perhaps even more higher. So if we are where the US and UK were 20 years ago what do you think is imperative in terms of the way that products are designed in terms of the way that you distribute these products to customers and the use of technology and how can we leverage technology to accelerate growth?
Well, a lot of the use of technology in India for so much of the consumer experience is highly, highly, highly personalized and when you look with regard to financial services and asset management it hasn't really caught up in the same way as so many other aspects of India has. So for example the ability to really understand what someone's objective is. I want to retire at this age. I want to save for a wedding. Understanding that and backing into the right portfolio automatically rebalancing that portfolio and I think very different than many other aspects of someone's life. The real miracle of investing is that that compounding of return. So if you could save 10 basis points, 0.1% year after year after year after year with regard to expenses and if you could generate half a percent, 1%, 2%, 3% of extra return as you aspire to that outcome the effect could be profound. So the opportunity here in terms of bringing these methods that are really at this point quite common in other parts of the world bringing them to India and the scale that India provides, it's so exciting to us. You know if you look at Jio BlackRock we launched roughly 7 months ago and we have 1 million customers. There are very few places in the world where that would even be a thing that would even an aspiration. So the ability to take what we've built at BlackRock for so many decades and implement it locally at the scale at the consumer level. There are very few places in the world where you could really do that like you can in India.
So a million customers in India what's the aspiration in the next few years.
It depends on if you ask the two of us or if you ask Larry and Muk.
I don't see any reason why. Well, first, I think many more people in India need to enter the capital markets. I think many more people in India need to take advantage of that miracle of the compounding of returns. And there's no reason why as we look forward 1 year, 3 years, 5 years, there can't be many millions of Indians benefiting from the capabilities of Jio BlackRock.
Mr. Kamath, you know you said that we need to move beyond legacy and in many ways we need to start afresh. Let me ask you that in the context of the use of technology but also designing products that are going to be relevant for the Indian market also the regulatory recalibration perhaps that is required to ensure that we go from the 800 billion that we currently are at and grow twice as much.
Yeah, I think break it into two parts or three parts. One is product capability. I think our partners bring that in abundance. They are the leaders in the world and that they have the ability to model and design products as appropriate to any geography. So I think they have now understood this market along with the new vehicle that we have and now I think we can bring the knowledge that they have gained elsewhere to this market. So I have no doubt about that and here it's very interesting. So you have a phase where you need to understand whether the customer is willing to use technology. We had that experience of plenty in the bank. The customer was willing to use technology. Every bank said the customer is not willing to take technology and that's what you saw happen from 2000 onwards today. I think the same thing needs to be done in the mutual fund industry. There's a particular way we expected the customer to deal with us through an agent network. For example, a question today that could be asked is is the customer willing to deal with us directly or in a hybrid way but more directly can we have large part of the business direct and that's the model that has been launched and in a way the first few months were a test of this I would say approach and it is clearly proven to be right. For example, we have not talked about it, but of the million or so customers that Rob talked about, you know there are 100% have come online about 25% are new to mutual fund who have come online. So and I told my colleagues that I can't believe this number because if I put myself in new to mutual funds I have not been into mutual funds and I'm going to come online and get on and buy a mutual fund. I would have said I will hesitate but the young Indian is not hesitating. Exactly. So we need to learn one is not it's not I got an anecdote to this which is even more interesting. So clearly that is proven that you are getting people online who are new to this. We need to scale this up now and imagine 10x or 50x in terms of what we have done. If it is 1 million what is that x number? They will determine quick order. Other thing is then we tested this hypothesis of Gen Z or Gen Alpha or earlier. So I mentioned this to some people you know I knew who were on our common boards and so on and I just mentioned and I had a message from one of these people very well regarded everybody knows him so I won't name him. He says I got on this and he didn't tell me he was getting on in 1 minute I had my account going in 1 minute and Hitesh told me a story yesterday that somebody else that he mentioned to in one and a half minutes I had my account going so clearly I think you provide appropriate technology India has come of age to say that I am willing to experiment with that technology irrespective of my age and I think that we learned during COVID because everybody had to become literate in a way to use a machine and transact financially. So that I think is an advantage that we have and it works to any service provider financial services provider which is digital first and has low legacy.
Well you're giving quick commerce a whole new meaning now Mr. Kamath you know account openings in a minute a minute and a half but Rob you know coming back to...
But wait a minute your payment we open an account in 3 minutes so please please try it out. You should try it later. Open an account.
I most certainly will. But Rob, coming back to the use of technology and AI specifically, and we were all in Davos, and if I were to do a word cloud, if it wasn't President Trump, it was artificial intelligence and AI. The use of AI specifically, you know, you and your team are behind Aladdin. And that clearly symbolizes the magic of artificial intelligence. But what happens to human stock pickers? I mean, you know, are they going to be relevant any longer?
Absolutely. And I think what's important about investing is that part of it is art and part of it is science. And I think if you look at the different methodologies that we have within BlackRock, we have quantitative capabilities and a lot of those quantitative capabilities we were able to transport to India in terms of how we actually leverage AI to create alpha signals. But at the same time you have human intuition and importantly going back to this concept of stock pickers. If you think about what the traditional process has been you have a group of people who lock themselves in a room and they read stuff and no matter how much of a speed reader you are, there's only so much stuff you could read in a given amount of time. And now you have these capabilities that really enable the human to have access to someone who could read everything produced in the world, who could summarize everything produced in the world, who could figure out trends, themes, and actually use it to inform the human intuition, use it to inform the human stock picking. So I think there's room at least for the next decade. There's room certainly for both. And it's really the human to the power of AI more so than we have robots sort of choosing stocks for the rest of time.
So we still have a decade.
At least. I'll reassess in a decade.
You'll reassess that. But we've got about 30 seconds left. Mr. Kamath, I'm going to start by asking you, you know, you're a perennial India bull. But what makes you most specifically bullish on the India story in light of the fact that we have just presented a budget which has laid out the road map for a more medium to long-term bet on the knowledge economy on artificial intelligence on electronic manufacturing what makes India most compelling today?
Very simple Shereen I look for patterns in everything that happened you look for examples and patterns so you look at transformation stories in a country context Japan 20 years went from nothing to very powerful we're talking about 70-90 China late '90s to 2015 similar story our story has started only four five years back and if you look around us we know how much is to be done that gives you the path as it were or the runway as it were and that to me is at least 15 to 20 years minimum so you have the runway and then you see all the exciting things that you mentioned just now happening. You put one on top of the other, you have a pathway for the next 20 years which is definitely going to be at least 10% year on year growth and within that we stitch our story.
Within that we stitch our story. Rob Goldstein the final word to you. What makes India the most compelling story for you?
I've had the privilege of coming here since 2010. And when you have the opportunity to travel the world and India is part of your rotation, you could see with your own eyes the opportunity. You see the opportunity how it emerges with regard to human capital. You see the opportunity how it emerges with regard to technology here. And even importantly, you see the opportunity with regard to infrastructure and something like the coastal road and how that's changed the whole city of Mumbai. So as we look at India, the opportunity set here is striking. There are few places where you'll get off a plane anywhere in the world that will have the growth rate that will have the knowledge base that will have the STEM graduates and importantly where you will have as many people on an absolute basis just the sheer numbers of people who are entering the middle class who are entering that mass affluent and affluent segment it's unparalleled anywhere in the world.
And an unparalleled story. Rob Goldstein, K.V. Kamath, thank you so much for setting the stage for where India stands but more importantly for the headroom for growth for India's financial services sector and for the mutual fund industry in specific and thank you very much for articulating for us what Jio BlackRock's plans are for India. Appreciate your time ladies and gentlemen. A big round of applause for K.V. Kamath and Rob Goldstein. Thank you very much.
And without further ado, may I request the chairman of Reliance Industries, Mr. Mukesh Ambani, and the chairman and CEO of BlackRock, Larry Fink, to please join us on stage. Ladies and gentlemen, a big round of applause for the two leaders who join me in a conversation on what it will take to invest in a new era, the trends that will shape our investment choices.
Mr. Ambani. Larry Fink, thank you very much and welcome to a warm sultry Mumbai from a very cold Davos. Larry Fink where you were in the throes of conversation with world leaders about the world order or the world disorder. So let's get started with that. We're talking about investing in a new era. What are the changes that you foresee that will shape the investment choices, the investment decisions of leaders like you as we look at this new era?
