These assets, which include uncollected shares, dividends, mutual funds, and more, pose a substantial burden that is made worse by problems like insufficient knowledge, out-of-date information, and ineffective administrative procedures.
Notwithstanding these obstacles, nascent technologies such as blockchain and artificial intelligence (AI) have prospects for expediting the detection and retrieval of these misplaced assets. This invention is not just futuristic, it is a reality of the present that is changing the financial environment.
Current landscape
The field of asset recovery is dynamic and complex, and it has changed significantly over time. Asset recovery in India has always included laborious court disputes, voluminous documentation, and manual methods. The existing procedures are frequently cumbersome and ineffective, which makes it difficult for people and organisations to recover misplaced or unclaimed assets.
AI’s arrival is destined to completely transform the asset recovery process. By doing so, fraud and mistakes can be drastically decreased, guaranteeing that assets are properly recorded and quickly returned to their original owners.
Understanding unclaimed assets
With large sums of money inactive in the form of unclaimed bank accounts, insurance policies, investments, and other financial instruments, asset recovery has become important in India.
Traditional investment/money recovery approaches confront many obstacles as the financial landscape becomes increasingly complex. Various factors contribute to these assets going unclaimed, including shareholders forgetting to update their contact information or losing track of their investments when their lives change and heirs not knowing what rights they have. However, new developments in blockchain technology and artificial intelligence (AI) provide creative ways to improve and expedite the asset recovery procedure.
Technological innovations
By offering an unchangeable, transparent ledger system that can safely automate asset transactions and trace ownership, blockchain technology presents a game-changing alternative. Blockchain guarantees transparency in the context of unclaimed assets at every stage of the transaction, from the first share issuance to the declaration and dividend distribution.
The defining feature of blockchain technology, smart contracts, can reduce administrative costs and guarantee regulatory compliance by automating the process of identifying rightful owners and transferring assets based on predetermined criteria.
AI can speed up asset recovery by increasing asset identification efficiency and accuracy through the use of machine learning techniques.
Role of organizations and financial advisors
Recovering lost money requires the assistance of financial advisors and companies that specialise in unclaimed asset management. In addition to providing end-to-end support services, including managing paperwork, facilitating legal documentation, and liaising with regulatory bodies, these businesses also educate their clients on the importance of maintaining current contact details. By maintaining constant contact with registrants and businesses, these organisations ensure a smooth and efficient claims process.
Financial advisors are also crucial in helping their clients plan forward financially. Advisors who emphasise the importance of account consolidation and routinely update personal information lessen the risk of unclaimed assets. Another way that financial institutions’ strong notification systems ensure that investors take quick action to recover assets is by making sure they are informed about dormant accounts or unclaimed dividends. It’s also critical that they understand how to use Blockchain technology to manage unclaimed assets and interpret AI-driven data.
Addressing systemic issues
Indian unclaimed asset percentage is high due to several factors like population mobility, complex legislation, and inadequate financial knowledge. Improved financial education and awareness among investors are necessary through concerted efforts to address these systemic problems. Encouraging people to manage their financial portfolios effectively, including giving them a clear understanding of their rights and responsibilities as investors, should be the aim of educational initiatives.
Regulatory changes that enhance accountability and transparency in asset management are also crucial. The effectiveness of investment/money recovery procedures can be greatly increased by utilising technology to enable real-time changes to investor information and to modernise record-keeping procedures. Working together, regulatory agencies, financial institutions, and digital companies can advance these reforms and build a more responsive and inclusive system.
In conclusion, releasing unclaimed money requires India to adopt a comprehensive strategy that includes technology, education, and regulatory reform. Revolutionary opportunities to speed up asset recovery, boost transparency, and streamline asset management processes are presented by blockchain and artificial intelligence.
Using blockchain and AI to recover investment/money ensures compliance and transparency while also enhancing efficiency. In the long run, this will benefit claimants and asset holders since financial advisers may utilise this technology to speed up recovery processes and minimise human error.
Allow innovation to be the engine of change as we skilfully navigate the complex financial landscape. Collaboratively, we can unlock the wealth of unclaimed assets, enriching people’s lives and propelling India’s economy.
Vikash Kumar Jain is co-founder and director at Share Samadhan.
