There is a great potential in “unadvised assets”. The necessary growth rates for a profitable business are close to hundreds and millions of AUM increase per month. Alternative steps needed to be taken by the businesses are:
• Substantial growth in terms of AUM has to be made.
• Varying customer acquisition costs will have to be taken into account during profitability calculations.
• Shift to adjacent markets; from pure online to more sophisticated hybrid services.
• Separated commoditized investment management services and focus on areas of finance and estate planning.
• Get rid of proportional fee model.
Read more at: http://bankinnovation.net/2015/07/half-a-dozen-possibilities-in-automating-asset-management/

The credit facilities for business have always created a negative impact on credit score. The requirement of capital has been the prime concern for a successful business. The credit score is recorded as per the credit facilities one takes from the financial institutions. The credit score indicates the status of the person and takes into account the financial condition of the person. The credit score record the history and the individual have a specific allotted number by which the financial institutions check before giving credit. Rate shopping helps in continuous evaluation of interest rates before any credit purchase. The FICO score helps in determining the credit score in the daily basis transactions. The FICO scores determine how one individual is capable of maintaining their proper credit score. One with a high FICO score tends to take less credit on credit cards and maintain a proper debit credit ratio. The credit reports are essentially important to determine the credit score of an individual.

Read more at:  http://www.business2community.com/finance/understanding-many-credit-inquiries-can-hurt-credit-score-01284708

Banking sector has embraced new technologies to provide better services to its tech savvy customers. Hare are 4 ways that illustrate how banks have adopted new technologies:

(i) Mobile apps: several banks and financial institutions have generated mobile apps that provides mobile payment services.

(ii) Wearable tech: A major section of consumers prefer using wearable devices to make payments. Keeping this in mind, banks have launched apps that are supported by wearable devices.

(iii) Social presence: Banks are going social with their presence in various social media and networking sites.

(iv) Financial gaming: Financial institutions are using gamification technology to attract customers. Several financial institutions have launched gaming platform where customers, on the basis of how often they visit the bank’s website, can earn points and win prizes. Read more at: http://www.cio.in/feature/how-big-banks-use-tech-to-attract-savvy-consumers#

Increased life expectancy in the Asian region means plenty of business for insurers, with need for health insurance etc. Insurance premiums are growing faster than Europe and North America yet still largely it remains underinsured. Culture dictates that majority build up savings themselves rather than pay someone else to bear it. Innovative products are offered for specifically for Asian countries because of the demographic dividend. The growth of the insurance market is typically fuelled by innovative product design and population pressure. Many global insurance tycoons are joining hands with Asian tech firms, banks to launch their products in the large expanding markets.
To know more: http://www.economist.com/news/finance-and-economics/21654086-insurers-asia-cauldron-innovation-also-competition-astounding?zid=300&ah=e7b9370e170850b88ef129fa625b13c4

The Financial crisis in Greece has led to the worst economic meltdowns in modern times. The ripple effect is projected to hit the US shores as:
1. With plunging global markets, analysts claim that the situation in Greece could end the six-year bull market in the US. But this scare is pertinent if the crisis spread to other countries of the Euro zone too.
2. Since the Euro is plunging against the dollar, European holidays will become cheaper. Travel agencies are advertising deals on European vacations.
3. Mortgage rates are projected to be stagnant as it is closely follows the global markets.
To know more: http://www.washingtonpost.com/blogs/wonkblog/wp/2015/07/05/3-big-ways-the-crisis-in-greece-could-affect-americans-personally/

Time and money are the two determining parameters for small businesses. Entrepreneurs often have to fulfil many roles and handle over some responsibilities in exchange for welcoming in others. HR tech lightens this burden. In small businesses, huge workloads are handled by a few individuals. Hence embracing technology is rewarding, using HR tech lessens time spent on administrative tasks and costs too. Small businesses look for technology which is cost effective, and can be applied by effective small teams. Data and records help in deciding the process confirmation, as successful projects must be repeated.HR technologies are the bridge of efficiency and cost reduction. To know more: http://www.business2community.com/small-business/why-are-more-small-businesses-turning-to-hr-tech-01272723

FP&A and S&OP are the two most essential processes for every organization. In modern times both have developed successfully and have started to take part in managerial decision making processes. The advantage of FP&A is that it envisages the results of the decisions that the organizations undertake. It achieves this by scrutinizing both the past performances and present activities and hence it makes the data readily accessible wherever required. While S&OP being one of the integral components of supply chain management, reduces the inefficiencies of the supply chain. It helps the firms to alleviate risks. FP&A on the other hand, manages everything from budgets to predictions. Therefore, both are equally important to a business for running efficiently.

Read more at: https://channels.theinnovationenterprise.com/articles/fp-a-or-s-op-which-adds-more-company-value

A recent survey on customer retention revealed that insures lose as much as 20% of their customers each year. For the insurance agency this corresponds to approximately £500,000 to £1 million in lost premiums for every 1,000 policies. Customer retention is thus an important issue facing the industry. Three key points can help insurance companies to eliminate customer churn.
• Firstly, they need to properly understand their customers, which mean determining overall market segmentation to understand cross sell and up sell opportunities at individual policyholder level.
• Secondly, insurance companies must be able to provide tailor made policies for each individual and also have a unique selling point in comparison to their rivals.
• Lastly, companies need to realize that they have to listen to their customer’s preferences rather than the customer having to choose from the list of policies the insurer has to offer.
Should the above be kept in mind in a company’s planning and operations customer churn can certainly be minimized if not completely eliminated.

For more information visit:
http://blogs.sap.com/banking/2015/06/19/preventing-customer-churn-with-better-data-analytics/

Banks lose money with small business loans because of high operating costs cannot make up profit from the net interest spread. Components determining costs of a $100,000 loan are origination, underwriting, loan review, operations, monitoring and collections, and compliance. Locking in a loss and reversing a loss are vital strategies, to reinvent internal cost structures. Management can effectively turn around the situation by:
1. Evaluating the profitability on more holistic basis
2. Increase cross sales
3. Process improvement, by simplifying processes.
4. Outsource or partner on lending, by allowing alternative financiers help reduce cost and increase productivity.
To know more: https://www.bai.org/bankingstrategies/Strategy/Small-Business-Banking/Making-Small-Business-Loans-Profitably?cclass=pointOfView

In the present economic landscape, operating costs are critical in deciding competitive advantage. To explain cost gaps, size, sales channel, product mix and geography comes into the picture. Management decisions play a key feature in operating cost in the following roles:
1. Business complexity an important player, as large product portfolios and multiple brands produce higher cost on average. Higher complexity leads to inadequate priced contracts.
2. Operating models show that optimized setup reduces costs. Workload backlogs lead to customer dissatisfaction and deteriorate financial performance.
3. IT system landscape is a root cause to failing economies of scale.
4. Performance management helps reducing costs and improve company’s culture
To know more:  http://www.mckinsey.com/insights/financial_services/what_drives_insurance_operating_costs

Public Sectors Bank (PSBs) can’t lend as long as they have huge Non Performing Assets (NPAs). According to the latest financial stability report by RBI, stressed assets have risen from 10.7% to 11.1% in March 2015 from Sept 2014. The process of dealing with loans is very slow which leads to inefficiency. In order to de stress these assets, either provide extra capital to PSBs or get rid of NPAs from the balance sheet. The former is difficult since the scale of capital needed for the purpose is huge, which the current fiscal situation would not permit, latter being the only resort available. Cleaning up NPAs would also give the much needed capital for lending. Read more at: http://blogs.economictimes.indiatimes.com/Myth-n-Reality/unburden-banks-of-non-performing-assets-for-faster-economic-recovery/

There is an indirect effect on the rupee from the Greece crisis, even though India has less direct exposure. Dr. Raghuram Rajan (RBI Chief) in his article says that India is well guarded with good macro-policies and a healthy economy. Amidst the turmoil, the rupee has remained stable against the dollar and euro. Thanks to the foreign exchange reserves India is projected to fend off any impact from the crisis. Analysts have put the same claim that stronger economic fundamentals and comfortable foreign reserves are enough to see off any impact. Also amidst stimulus programme, the Greece crisis is said to be grounded. To know more:  http://profit.ndtv.com/news/greece-crisis/article-greece-crisis-may-impact-rupee-raghuram-rajan-777442

Banks, when adopting a mobile-first strategy, should look beyond mobile apps. To achieve a successful mobile-first strategy, banking sector should deploy data analytics. Although several tech giants are threatening traditional banks with their mobile enabled financial services, banks possess certain advantages. They are a trusted source for financial services and have maintained long-term relationships with millions of customers. Banks possess a wealth of customer data, transactional data to be specific, which can be leveraged to gain insights on customers. This will help banks to understand customer behavior and target their behavior. Read more at: https://channels.theinnovationenterprise.com/articles/7649-banks-are-pioneering-the-mobile-revolution-but-can-they-see-beyond-the-app

Microfinance companies are financial institutions that provide banking services to low-income groups or individuals. The concept was first developed by Bangladeshi economist Professor Muhammad Yunus. Microfinance companies can be widely found in developing countries as many regions of these countries lack access to mainstream banking services. It has witnessed widespread success in developing countries and won praises from many. But there exists ethical issues with microfinance companies. Though they provide the poor with funds to escape poverty, it burdens the vulnerable section with debt. Profiteering in the sector has also been reported. Thus there is a need for increased regulations to ensure transparency in the operation of microfinance companies. Read more at: https://channels.theinnovationenterprise.com/articles/the-growth-of-microfinance-companies

With the ever-increasing number of mobile phone users, banks should adopt a mobile-first strategy. Traditional banks are facing a threat from tech giants who are now focusing on developing mobile-based financial services. To achieve a successful mobile-first strategy, banks should resort to agile methodology. With the help of agile methodology banks can solve many challenges that they are facing today. With mobile technology, data on customer needs and preferences will be generated which can be leveraged to gain insight on customers. Lean start-up techniques can be devised for creation of new services in uncertain situations. Platform-as-a-Service (PaaS), a cloud technology solution can be used to develop mobile apps. Thus, a successful mobile-first strategy requires an IT infrastructure enabled to adopt agile methodology and can leverage data and analytics on a big scale with PaaS. Read more at: https://channels.theinnovationenterprise.com/articles/7609-how-can-banks-achieve-a-successful-mobile-first-strategy

The use of electronic cash is gaining popularity. Particularly the use of electronic cash transfer through cellular services is increasing rapidly in the developing world. It is estimated that electronic currency system will improve lives of more than 2 billion people, who live on less than 2 dollars per day. Use of electronic transaction system will facilitate more secure, accessible, and reliable ways to store and transfer money than are currently available. The most important thing in this context is the role of agents conducting cash for electronic value and vice-versa. By developing such a network a robust and efficient banking system can be developed. To know more read: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2549171

“Starting from today i.e. 15^th June, 2015, Zimbabwe will phase out its official currency Zimbabwean Dollar and adopt US Dollar as its official currency”

This may be shocking news to some because a country is completely doing away with its own currency but actually, this is rather a late move by Zimbabwe as this country has been facing hyperinflation for the past few years. Hyperinflation is not just a theoretical concept, in the last century, it has two such instances had been observed. They are:

• Germany in the 1920s
• Hungary post WWII

Both of them were consequences of World Wars but such was not the case with Zimbabwe. In Zimbabwe, the main reason was an ineffective monetary policy managed by the ruling government rather than its Central Bank.

Reckless printing of currency notes was done, while ignoring the quantity, cost and time constraints. The heights of printing were reached when they even issued notes of $100 trillion. This reduced the status of the currency to just that of token with not much buying power and thus this currency was ruined by 2009.

Since then, US Dollar has already been in use for day to day transactions. The Zimbabwean currency has been left as a memory or in old bank accounts. This move of completely phasing out this currency is just an attempt to clean up the banking system.

As a result of this move, Zimbabwe will lose its rights to control its own monetary policy but this also has been seen as a welcome move by some economists, hoping that this would improve the situation.

To know more, please read the following article by Tim Worstall, Author of the book, “The No Breakfast Fallacy, why the Club of Rome was wrong about us running out of resources”, at Forbes:

http://www.forbes.com/sites/timworstall/2015/06/13/this-isnt-the-death-of-the-zimbabwe-dollar-this-is-the-long-overdue-burial-of-it/

Micro lending is a way through which micro finance institutions (MFIs) provide micro credit to support entrepreneurship in rural areas. According to a Wall Street Journal report, experts have come up with ways that would make micro lending more effective. Instead of providing loans solely for investment purposes, MFIs could also lend for personal expenses if the borrower has the ability to pay back the loan with interest. Also, lenders should employ research to measure the success of the financial programs, making sure that the client not only returns the debt but does so while making a profit and not by selling his assets. Another way to make micro lending effective is to take up a holistic perspective. Quoting Iskenderian “Micro lending will be more effective if there are other safety-net and asset-building products in place—like insurance, savings and pensions—so that families can be secure and repay that loan.” Last but not the least is to make use technology for money transfer and big data analysis of mobile phone usage thereby easing out the whole process and saving time. Read more at: http://online.wsj.com/ad/article/mlf-5-ideas-to-make-microlending-more-effective

The sale of insurance and other similar products through a bank to help it customers at situations is known as Bancassurance. Development of Bancassurance in India began to improve the channels of insurance policy so as to reach the hands of the common, to widen the area of working of banking sector, to improve the services of insurance. The Reserve Bank of India and the insurance development and regulatory authority have a set of guidelines for companies to form Bancassurance. It basically encourages people to buy insurance policies increasing the number of providers. It also has demerits such as interest conflict of bank and insurance policies, compromising on data security, etc. Read more about this article at: http://tips.thinkrupee.com/articles/bancassurance-in-india.php