SigmaWay Blog

SigmaWay Blog tries to aggregate original and third party content for the site users. It caters to articles on Process Improvement, Lean Six Sigma, Analytics, Market Intelligence, Training ,IT Services and industries which SigmaWay caters to

THE PHENOMENON OF ‘’PINK TAX’’ IN CAR INSURANCE RATES

The existence of a gender based price discrimination where women’s products are typically more expensive than men without any reasonable cause is widely known as ‘’pink tax’’. Lately, this gender discrimination has extended to car insurance with women paying more despite men being risky drivers. A recent study concluded that women especially older ones pay higher care insurance in at least 25 states. The Consumer Federation of America (CFA) revealed that insurance company not only charges different rates based on gender but also on the city in which a particular person lives in. While some countries including California, Massachusetts have already prohibited gender based car insurance pricing, we can hope that greater reliance on big data can provide some solution. Big data is greatly helpful in determining fairer and accurate insurance rates based on relevant factors. Read more at: https://channels.theinnovationenterprise.com/articles/inconsistent-correlations-between-gender-car-insurance-rates

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Benefits of Big Data in Fintech Services

The ways in which financial enterprises operate today have changed fundamentally due to technological evolutions. Titanic amount of data gathered from individuals’ electronic devices can be analyzed and used by the Fintech sector to deliver reliable services to its clients. Big data have been offering numerous benefits to this industry in areas of fraud detection, customer segmentation, risk management etc. Big data helps financial enterprises understand the transaction pattern of clients and can inform them about suspicious transactions. Big data also partially, if not fully, rules out the potential threats from bad investments and bad payers. Fintech companies aim at creating personalized financial services and big data assists in doing so by meeting the specific demands of the final customers. Big data also leads to better compliance capabilities ultimately translating into better services for both B2C and B2B consumers.

Read More at: https://www.smartdatacollective.com/fintech-big-data-play-role-financial-evolution/

 

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AI in Finance and its Future Applicability

There is a growing concern about AI replacing human workers in almost all areas thus spelling out the fears of massive job loss, rise of robots and sophisticated computer changes to replace our world as we know it.  AI is being increasingly used in Financial Institutions where anyone availing robotic advisory services or has paid for transactions using bitcoins has also made use of AI in finance. We have probably noticed banks cutting on their staffs for addressing questions and processing transactions. This is because such financial institutions are deploying AI to help manage complicated programs, automate some trading systems and minimize the need for human support. It also plays an important role in helping with fraud detection and smart banking. Because of such advanced capabilities of AI, researchers like Bill Gates, Stephen Hawking, Steve Wozniak and Elon Musk have pointed out the growing possibilities of AI developing  destructive methods against humans or teaching itself over time to fight against humans as it sees itself as a super intelligent system. According to the recent estimates by the experts, AI will gradually replace workers who perform repetitive tasks, thus predicting job loss numbers as high as 800 million people by 2030.

Read more at: https://finance.toolbox.com/articles/ai-in-finance-present-concerns-and-future-applications

 

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India digitalises internationally

Prime Minister Narendra Modi launched three digital platforms in Singapore in a ‘Business, Innovation and community event’. The three digital platforms that were introduced were BHIM, RuPay and State Bank of India app. RuPay is linked to Singapore’s system through the network of international transfers (NETS). Payments can now be made across Singapore using the access points of NETS. People of Singapore can make online transactions using merchant websites which are linked to national payment corporation of India. SBI’s Singapore branch launched a rupee remittance mode which is connected to unified payments interface (UPI). This will facilitate cross-border trade between the two countries. Also, any customer at SBI Singapore branch having a savings bank account can transfer money up to 1 lakh. The indirect international effect of this digitalisation is the ‘Ease of doing business’ in India.

For more information visit:

https://www.businessinsider.in/three-indian-digital-payment-platforms-go-international-with-their-singapore-launch/articleshow/64417032.cms   

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Home loan interest rates hiked

Reserve bank of India’s monetary policy committee which met on 6th June, 2018 framed its bi-monthly policy. It had hiked the repo rate by 25 basis points which stands at 6.25%. The reverse repo rate has also risen to 6%. This will lead to rise in interest rates on loans given by commercial banks and hence the borrowers will be impacted badly. There could also be a rise in marginal based lending rate (MCLR) soon. The existing borrowers can compare the different lending rates by the banks (lenders) and hence can transfer their home loans on calculation of their savings. The new borrowers shouldn’t wait for a rate cut because the central bank will increase the rates in the coming future. They can borrow under Pradhan Mantri Awas Yojana(PMAY). It will offer an interest subsidy based on the income level of a person.

For more information visit:

Source- https://economictimes.indiatimes.com/wealth/personal-finance-news/rbi-hikes-repo-rate-by-0-25-home-loans-set-to-become-costly/articleshow/64464121.cms 

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The blend of AI and Big Data in generating business ideas

The union of artificial intelligence and big data analytics had awaken lots of business ideas in creative minds. Many of the start-ups are planning to come up with some innovative business ideas. As per the survey of 2018 around 97.2% of the companies are at the verge of implementing and launching AI and Big data initiatives. The executives of the companies now can visualise the potential. Large enterprises now can directly access the essential volumes and sources of data. These were used to understand the AI algorithm to resolve the patterns and its behaviours. Many companies like American Express and Morgan Stanley have publicly shared their success stories.

For more information, visit:

https://sloanreview.mit.edu/article/how-big-data-and-ai-are-driving-business-innovation-in-2018/

 

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Managing Cash Flow

Sometimes, small businesses can not accurately manage their cash flow. You do not need to be a finance person to keep your cash flow in order. You can develop a strategy that fits into your schedule and your business model. The following five cash flow management tips that will significantly improve your business’ financial health are: 1. Know your break even point, 2. Streamline your accounts receivable, 3. Maintain a cash reserve, 4. Extend your accounts payable, 5. Identify which expenses are essential for growth and which are not. Read more at: http://www.business2community.com/finance/cash-flow-management-tips-small-business-01915621#oDfWZ0ZGTO4YxymO.97

 

 

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Technological advancement in BFSI

Smart-phones have widely changed our standard of living and access and management of our money. A recent study by EY and BBA states that customer usage of banking apps have risen by 354% in last five years, with an average of 159 logins per second. Not only for banking purposes, UK customers use mobile tools to manage their mortgage and investments, credit cards and savings. Some suggest that this increased usage on financial apps isn't  short term but will have a long term effect. The technology is helping customers in this financial revolution by adding check imaging, contactless payments and biometric identification. This will help in the launching  of Open Banking in 2018 when customers will have greater choice and control over their financial lives. Read more at :

http://banking.com/news/apps-transforming-personal-finances/

 

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Prevention of Fraud in banks

 

 In the recent days, prevention of fraud is a very difficult task and banks should keep in mind some non-financial signals that might prevent a fraud. Fraudsters take advantage of the growing technology where a simple code interception can lead a criminal to hack a person's credentials. It is difficult to suspect any change in contact details as people change phone numbers very frequently and so the bank managers should put this down as a sign of potential threat. Bank managers should have the correct  solutions for these fraudulent actions happening. Fraud managers should have the latest fraud-preventing programs in order to receive the signals of a fraud before hand and can prevent it from causing severe damage. Read more at :

http://banking.com/analysis/non-financial-events-must-play-role-fraud-prevention-program/

 

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DATA PRIVACY- AN INDISPENSABLE ELEMENT IN THE BANKING SECTOR

Across the globe, in the banking sector, the increased exigency for sturdy laws to keep the customer's personal information secure is a result of increased involvement of Information Technology(IT) in the banking sector. In India, the following legislations have been introduced in the banking sector to protect customer's personal details: 1) As per the Credit Information Companies Act, 2005, CICs, based on the past records of the customers, determine whether they are eligible to access credit facilities, after which information are provided to the  financial institutions and have a restriction of not sharing the informations with any other party except the user, unless otherwise stated. 2) Another notion has been introduced under Insolvency and Bankruptcy code, 2016, known as Information utilities. It creates a robust data storage platform to store all the financial informations of the customer, helping the banks in lending credit to take better decisions. Despite having such strong legislations, customers often fall prey to phishers and end up sharing their personal details, which is clearly a result of lack of implementation. Read more at http://bankingfrontiers.com/data-privacy-banking-sectorstriking-balance/

 

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QUICK GRIEVANCE REDRESSAL FOR FRAUDULENT ACTIVITIES BY RBI

Nowadays, fraudulent banking transactions are being reported by a large number of customers, but as per RBI's  revised directions on ‘Customer Protection – Limiting Liability of Customers in Unauthorized Electronic Banking Transactions,' customers suffering any loss due to a third party fraud or unauthorized transaction caused due to fraud or negligence on bank's part will be solely borne by the bank, if it is reported within three working days and the entire amount will be credited to the customer's account within ten working days. However, if any loss is caused due to customer's fault or negligence, bank will not be liable to return any money. Read more at http://www.financialexpress.com/industry/banking-finance/customers-should-report-fraud-in-3-days-to-avoid-losses-says-rbi/752493/

 

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WHO IS MORE ADVANTAGEOUS? A CMO OR CFO

Now a days big companies like Coca-Cola, Mondelēz, Tyson Foods, and Kellogg are adding a new position known as CGO (Chief Growth Officer) in place of CMO (Chief Marketing Officer). Here question arises do we really need a CGO? Was CMO not enough to meet the current business growth ? What is the work of a CGO? Why CGO is being given importance over CMO? Role of CGO is amorphous. He has to take charge of the Marketing department into R&D, Customer Service, Analytics, and more. Even some times he is given charge of sales department. Work load of CGO varies from company to company. He can also give value to a business when CEO lacks a background in customer experience, communication, and engagement. Company’s performance not only depends on higher authorities like CMO, CGO and CEO but also employees working inside a company. So judge and choose a best option for your company.

Read more at: http://www.business2community.com/leadership/cmo-vs-cgo-business-need-chief-growth-officer-01835441#rixIFIrtpwyfDrZG.97

 

 

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GST is NOT a Whammy!

With the rolling out of the GST, there has been a whole set of expectations and  beliefs as to how this entire system is going to have an impact on the economy and bring changes in the existing structure. The main reason behind the fight to pass the GST was to subsume the various existing taxes into just one tax (one nation, one tax) and to mitigate the cascading effect of the taxes. The expectation is that the GST is going to increase the GDP by 100-150 basis point in the coming few years. But there are analysts who believe that this new system is going to have a short term negative impact and this shall last till the time the economy gets into the line of  this new system. But this disruption will mostly be reflected in the manufacturing activities. But at the end, the story is that the GST is being seen as a blessing in disguise, from which the economy is definitely going to be benefited! TO READ MORE GO TO 

http://economictimes.indiatimes.com/markets/stocks/news/how-painful-will-be-gst-for-stock-market-not-as-much-as-vat-was/articleshow/59348446.cms 

 

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How Banks Are Using Artificial Intelligence Upfront And Behind The Scenes

According to authors, AI is radically changing  the face of banking.  From daily  customer dealings ,learning from them and interacting  with them to becoming the face of their brand , AI/Robots simplifies complex tasks, by, informing  customers about their account balances, prevailing interest rates on mortgages, securities, making  transfers and payments based on voice recognition authentication, interacting in different languages thereby making transactions smooth and flexible and resolving customer grievances online. AI covers the following three techies :   1) Language processing, enabling  communication between computers and  humans, 2)Enables computers in locating similarities and comparing disparities between new and existing datasets , to sketch out patterns, via Machine Learning  and  3)Advanced software system  that provide personalized advice.   Read more at https://aitrends.com/financial-services/how-artificial-intelligence-will-revolutionize-banking/

 

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The Core Banking Solutions Market

Core Banking Solution (CBS) is networking of branches, which enables customers to operate their accounts, and avail banking services from any branch of the Bank on CBS network, regardless of where he maintains his account. By regional analysis, the market is segmented into North America, Europe, Asia-Pacific and Rest of the World, with North America generating the highest market share owing to higher technology implementation. Due to its capabilities to improve efficiency and better risk management, core banking solutions is growing rapidly. On the basis of solution segment, it offers better customer support service, provides single integrated platform to all the banking channels and lower operational cost, improves efficiency in streamlining process related to customer account management. Read more at: http://www.datasciencecentral.com/profiles/blogs/core-banking-solutions-market-analytical-insights-and-foresight

 

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Budget Tablet

A budget tablet is not completely useless. It can be put into various uses. 1) Car Navigation: Great way of viewing maps and directions. You can also check out Map: Directions & Local Search app by MapMyIndia. 2) Music player: At least 8 GB space can hold up to 100 songs and with live streaming unlimited songs. 3) Security camera: Tablet camera is as good as basic security camera in quality. 4) Book reader: You can turn your large screen tablet into an e-book reader. 5) Digital photo frame: Can be used as photo frame using a desk stand. 6) Personal Planner: Can be used as a digital planner for your day to day work. 7) WiFi router: If your tablet supports 4G, then the tablet can be used a s WiFi hotspot. Read more at: http://economictimes.indiatimes.com/wealth/spend/7-things-you-can-do-with-a-budget-tablet-for-optimal-usage/articleshow/59502473.cms

 

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GST myths cleared

A reality check by ET Wealth for both GST supporters and its detractors. 1) Now it is one nation one tax: Goods like petroleum, diesel are still outside GST’s ambit 2) Small businesses will suffer: Shops can go for manual billing and only for filing internet connectivity is required  3) Prices will shoot up: It seems high because entire system is visible  4) Corporate may try to profiteer but government won’t: Some State govt also act greedy 5) No tax other that GST is a reality: It only considers local and state taxes not the other charges 6) Economic growth will rise: Recorded economic growth will rise not the real growth 7) Pay GST twice for card payments: No additional GST for credit card payments. Read more at: http://economictimes.indiatimes.com/wealth/spend/gst-myths-busted-a-reality-check/articleshow/59501148.cms

 

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Insolvency Professionals (IPs)

After India enacted tougher laws to deal with sticky loans and the central bank stepped in accelerate the pace of recoveries, finance executives have stumbled upon a career-growth opportunity based, ironically, on insolvency. The Insolvency and Banking Board of India (IBBI), set up last autumn and tasked with providing the framework for recovery proceedings, conducts exams that allow chartered accountants, company secretaries, cost accountants, and advocates to qualify as Independent insolvency professionals (IPs). It is not the cushiest jobs. This role has challenges and is equally promising. Read more at: http://economictimes.indiatimes.com/markets/stocks/news/the-rising-league-of-insolvency-professionals/articleshow/59450739.cms

 

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Financial Risk Management And The Use of Technology

After the revolution of fin tech in India, the payment sector has seen that Indians are opting for online transactions and transfers. But it is important to keep in mind the security aspect of digital transactions. With increasing use of technology, the market of risk management is growing fast. AI is playing a huge role in financial risk management because of its ability to deal with lots of data with high accuracy.Read more at:https://www.entrepreneur.com/article/294816

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Financial Digitization and Automation

Digitization is now controlling the world and given a significant threat to various jobs. Banking and Financial industry have been affected maximum in this regard. After demonetization, payment wallets got a boost and make banking process simpler and easier.A Recent study by Citigroup revealed that around 30% of bank jobs could be lost between 2015-2025 in  the whole world. ATMs are also threat to lose jobs. But in many cases , complete automation is not possible for now because human supervision is required. Read more at:https://www.entrepreneur.com/article/294142

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