Machines – New Age Commandos

Posted on November 28, 2018Categories Artificial Intelligence   Leave a comment on Machines – New Age Commandos

We can’t imagine our lives without machines, but with the rise of hacking and cyber crime, there are some who are trying to limit the influence of machines. A machine can now do multiple tasks based on a simple voice command – Google, Alexa, Siri, etc. When hackers are able to break into smart devices, bank accounts, computer networks, etc, it creates chaos! Imagine losing a large chunk of your money overnight, at a time when you really need them. Machine is man made and any man made thing can be easily copied or manipulated by another man. By placing our implicit trust in a machine for important functions such as banking, we may lose big in case this machine fails.

What is Machine Learning?

Most people consider Artificial Intelligence and Machine Learning to be the same thing, but actually Machine Learning is a subset of AI which provides the ability to the systems to automatically learn and experience new things without being explicitly programmed for it. Machine learning focuses on the development of computer programs that can access data from different platforms and use it for themselves. The main aim of machine learning is to allow computers to learn automatically without human intervention or assistance.

Machine learning was first introduced by a group of British intelligence agents. They founded a new cybersecurity company called Darktrace.

The company partnered with mathematicians to develop a software/ device that would use machine learning to detect cyber attacks/ crimes. The bedrock of this system takes a new approach to prevent crimes. Whenever a device/ system is accessed by hackers/ criminals, they need to steal the data and transfer it to other devices on the network and devices outside the network.

Scientists have worked on isolating the devices which show an abnormal behaviour. Even when a device may be compromised, by isolating the device, it may not be able to send and receive data, thus, making it useless. Therefore, simply hacking into a device is no longer enough! A hacker has to build his own path out of the system with all the data that he has stolen.

To help the machine recognize a new instance of suspicious behavior, the programmers used a new technique called unsupervised learning. Traditionally, machine learning is dependent on the supervision of humans. However, in this situation, the machine changes it’s algorithm according to the specified conditions and it doesn’t need humans to specify what to look for. That is truly path breaking! No more supervision or inputs required for fraud prevention.

The vast majority of machine-learning applications depend on supervised learning which involves feeding a machine with massive amounts labeled data to train it to recognize a narrowly defined pattern. If you want your machine to recognize humans who are wearing suits, you feed it hundreds or thousands of images of people who are wearing suits and of people who are not, all the while explaining it clear which ones are which.

In the field of cybersecurity, supervised learning seems to be a problem, as you can train your machine with threats that your system has faced before. This makes it vulnerable to any threat that it has not seen in advance. Unknown threats are not deduced by machines and other supervised learning work. Additionally, there are data sets available, which make it easy for hackers to predict what an algorithm is trained for. This again makes it easy for hackers to break into a system.

This is why the new system of unsupervised learning excels. The machines look through massive amounts of unlabeled data and it doesn’t follow a typical pattern. So it is able to detect threats that the system has never faced before. Darktrace sets up physical and digital sensors around the network of the client to get an exact detail of the activity.

The data obtained is then funneled to over 60 different unsupervised algorithms that compete with each other to find any suspicious behavior in the system. In case of any red flags, the suspicious device/ network/ software is ring fenced and isolated from the rest of the system in order to stop the hack in its tracks.

Machine learning has helped detect, prevent and fight many cyber crimes across the globe. As the industry grows, the importance of machine learning is growing day by day. The need to learn and the need for experienced hands to manage it is also increasing. The ability to design a software that can detect and prevent crimes without any active efforts on the part of the programmer will surely be a skill.

BSE Institute, a 100% subsidiary of BSE India, provides many short-term online courses on bsevarsity.com. It offers courses for students and working professionals who wish to upgrade their skill and knowledge in a constantly evolving workplace. A basic course on Introduction to Machine Learning can help students and senior professionals to enhance knowledge in the new domain of machine learning.

Plan Early – Stay Comfortably

Posted on November 27, 2018Categories Mutual Funds   Leave a comment on Plan Early – Stay Comfortably

A wise person should have money in their head, but not in their heart.

– Jonathan Swift

Investing may sound quite risky for some – especially in a period where we have a highly volatile market! While most people talk about the great profits that they earn while trading, very rarely do they talk about the preparation involved before investing. It is tough! Its a long learning process and few investors understand it completely. Unfortunately many people blindly trust speculators and that is where they lose money.

Now a days, we hear smart 24-year-old professionals talking about planning for their retirement. This would have been unimaginable a decade ago. A typical individual starts thinking about his retirement in the late 30s or 40s. Most of them start by investing in mutual funds, equities, fixed deposits, etc. However, most are confused about the exact plans that they need to have. At such times investing in mutual funds is considered as the safest investment and is the best way to earn more before retirement.

What is a Mutual Fund?

A mutual fund is an investment vehicle built with funds collected from investors, solely for the purpose of investing in stocks, bonds, money markets etc. They are operated by expert money managers and equity analysts who invest using their experience and the data available to them, with the aim of getting maximum capital gains or income for the investors.      

As people start thinking about their retirement from the early days of their career, it makes sound financial and business sense to offer investment products, which can offer them the returns they seek.

Few other reasons why people seek to invest in Mutual Funds are:

  • Most of them don’t have a company-sponsored pension.
  • They do not want to disturb their families or kids for help post retirement.
  • People are living longer these days, so they have to plan early to stay comfortably in their retirement.
  • Improper financial education – thus, they tend to trust financial managers

Mutual funds are considered to be the best investment option that retail investors have. An investor can invest a small amount like Rs 5,000 each month and watch his principal amount grow by as much as 15-20%. Only equities have the power to offer inflation beating returns over a long period. This is why, most of the funds traded globally are in equities.

Types of equity mutual funds –

  1. Large-cap mutual funds are ideal for people who don’t wish to take risks. Companies invest in blue chip stocks, which grow as and when the stock market grows, but not always at a rapid pace. However, history has shown that investments are relatively safe.
  2. Multi-cap mutual funds: Suitable are for moderate risk takers.
  3. Mid-cap and Small-cap mutual funds are perfect for aggressive risk-takers who wish to earn more in less time. Mid-cap and small-cap companies are the ones which investors are betting on to grow rapidly. These are high growth companies, but are highly risky investments. As an investor, one needs to be an expert to invest in high risk high reward investments.

It is important to understand that one cannot rely solely on their salary/ income. You need multiple sources of income to earn enough and enjoy a comfortable life even after retirement.

An investment in knowledge pays the best interest

– Benjamin Franklin

With an increase in the returns offered by mutual funds, it has become extremely important to understand how they operate. BSE Institute offers many short-term courses for investors, to learn about various investment options, on its platform bsevarsity.com. A Basic Course on Mutual Funds can help you gain expertise in the field of mutual fund investing, in just 4 days!!

 

AI – The New Spark in Marketing

Posted on November 21, 2018Categories Artificial Intelligence   Leave a comment on AI – The New Spark in Marketing

We don’t realize it yet, but the reality is that we use Artificial Intelligence (AI) for almost every thing that we do online! Google, Amazon, Facebook, etc, heavily use AI to provide the services which they offer. Google Search uses AI for predicting the exact nature of our query. The same is applicable for Facebook, Amazon, Flipkart and a host of other tech companies.

We use voice commands to talk with Siri, Alexa or Google and get an answer for all our questions immediately. Isn’t it great when you receive quick responses from any website’s chat-bot, no matter what the time is, or which country you are living in? Yes, marketers know that this attracts consumers. Using AI, brands get a better understanding of what consumers want. AI allows marketers to understand a consumer’s behaviour on his website and on Facebook, Amazon and other sites that could share data with him.

In today’s business world, every corporate is focused on gathering data in order to build a consumer’s personality profile, which allows marketers to target them in a manner that makes sales easier.

AI allows companies to gather more data and apply it effectively by using techniques like adaptive learning, machine learning, natural language processing and computer vision learning. These allow marketers to analyze the online market data and offer deep information insights, which help in generating more sales. Any insight that a marketer gets is worth its weight in gold! That is an additional bit of information, which can be the key point that helps them sell the product.

AI-based virtual assistants like chat-bots help consumers, who get all the information they need by simply logging on the website. AI bots also provide 24-hour assistance to its customers, thereby providing better customer service. By being available 24*7, the bots are eliminating any chances of a consumer leaving the website without being convinced, thus increasing the chance of a sale.

AI’s tremendous growth in the field of marketing is due to the increasing demand for digital assistance and data science. AI helps companies in lead generation and customer acquisition. It helps the marketers to optimize the ads they run online. Their ads are shown only to those who are genuinely interested in these products. Content placement, media buying and campaign optimization is extremely necessary as per the interests, behavior and the need of customers. This is true specially for companies such as Google and Facebook, which depend heavily on advertising for all their revenue.

According to MRFR, the growth of AI in marketing is expected to generate a value of over USD 21 billion by 2023. Currently, the key players in the field are IBM, Google, Microsoft, Samsung and Amazon.

The latest trends provided by AI in the field of marketing are individual personalization, social media image recognition and conversational marketing. This allows a unique message to be crafted for each consumer. This helps marketers identify individual consumers in nano seconds and lets the platform say exactly those things which can convince them to buy the product. Due to the constant updates in the algorithms of these AI bots, companies are able to offer more relevant content to the user and thus enhance the overall customer experience.

AI also provides a 360-degree opportunity for the growth of all industries

  1. For large MNCs – AI helps to boost growth and profitability and transform businesses. For example: In manufacturing, this sector could see a share-of-profit increase of 39% due to AI-powered systems – whose ability to learn, adapt and work over time can eliminate faulty machines and idle equipment. This can help manufacturers utilize less space, less raw materials, less labor and produce/ sell more in a short period of time.
  2. For entrepreneurs and young companies – AI can work 24*7 and can play a major role in identifying the ideal consumers. It is one of the most inexpensive technologies which can help young companies chart out a future path – only on the basis of data received.
  3. For society – AI can help improve public safety by securing consumer data. As it can work 24*7, any human error that could be involved is also eliminated. AI is predicted to soon eliminate driving, as AI software are now used in autonomous/ self driving cars.

In India, AI is growing is growing at a scorching pace. Titan, one of the most trusted  Indian brands, has been a darling of the stock markets. It is one of the first established Indian brand that understood the importance of AI in providing personalized experiences to the customers.

It launched a chat-bot on its e-commerce store to engage its shoppers in a better way. The chat-bot conducted automated intellectual conversations (which were in line with the brand’s strategy) with customers by understanding their behavioral pattern and offered them a highly personalized shopping experience. This helped Titan to get a much better engagement rate and improve conversion rates.

As technology changes rapidly, marketers are modifying their strategies to stay ahead in highly competitive markets. India is the next battle ground forAI, machine learning and analytics are playing a major role in speeding up this shift.

BSE Institute is a 100% subsidiary of India’s oldest and the world’s largest stock exchange BSE. It has developed an online platform, bsevarsity.com to train students and working professionals to about various topics and subjects that are in vogue. BSE Institute’s short term course on AI, helps students and marketers get a foothold n this rapidly evolving field. A simple course on Artificial Intelligence can help you to learn all about Artificial Intelligence and start contributing at your workplace from Day 1!

In the future, AI will enable marketers to create a new experience for customers and meet their needs like never before. Marketing is expected to get more intelligent and AI will be at the center of it.

 

Investing in Commodities

Posted on November 14, 2018Categories Short term programmes   Leave a comment on Investing in Commodities

Commodities play an important role in our everyday lives. Oil, metals, food, etc. are all commodities. Any fluctuation in their prices results in changes in the prices of many other commodities. Oil/ petroleum is one of the most important commodity as petrol/ diesel cars are used to transport goods and provide services. Any increase in the price of petrol/ diesel eats into the profit margins of traders and businessmen and this forces them to increase the prices of commodities they are trading, to recover those costs.

Anyone who drives a car daily may get affected due to the rising prices of petrol. Sudden snowfall in Kashmir will affect the availability apples and thus result in a sharp rise in prices. Similarly, a poor rainfall or a drought can result in a steep increase in the prices of crops and many other products where agricultural products are the raw materials.

Just like stocks, commodities have for long been considered safe investment options. The logic for this is simple – people will always need food, oil and a host of other commodities for their daily activities. Traders have been investing and trading in commodities for many centuries. This is due to the fact that, they are easy to track and invest in.

What is a Commodity Market :

A commodity market is a physical or imaginary workplace for buying, selling and trading different types of raw or primary products available in the world. There are currently about 50 major commodity markets in the world which facilitate investment trading of approximately 100 commodities.

Commodities are divided into two types-

  1. Hard commodities – Hard commodities include natural resources which are extracted like metals, rubber, oil, etc.
  2. Soft commodities – Soft commodities include agricultural products like rice, corn, wheat, etc.

A commodity market has a huge impact on the country, much more than financial markets! It is very important to have an active, vibrant and liquid commodity market. There have been instances where some traders hoard up certain commodities to create an artificial scarcity. This drives up the prices of products, even when there is no real scarcity. These traders, stand to get a healthy profit margin, even in normal market conditions by artificially creating scarcity.

Rise and Growth of Commodity Market in India

India is a commodity-based economy, where more than two-thirds of the population depends on agricultural commodities. With a large chunk of the population working on farms, India needs many more commodity markets which can help farmers and traders. It is quite shocking to know that one of the largest agricultural markets in the world has an underdeveloped commodity market.

India has a long history of commodity trading, it was considered among the first countries to have started commodity trading. However, years of foreign rule, droughts, periods of scarcity & government policies stifled commodity trading.

Commodity trading was restarted in India in 1875 with the setting up of Bombay Cotton Trade Association Ltd. It was one of the first organized futures market in the country. Other commodity markets started establishing markets in different areas of the country after 1875. The regulatory body of the commodity markets was known as the Forward Markets Commission (FMC) which was set up in 1953. The FMC was later merged with the Securities and Exchange Board of India, SEBI on September 2015.

The various commodities that are traded in India include –

  1. Metals : Gold, Silver, Nickel
  2. Agricultural commodities : Wheat, Rice, Cotton, Corn
  3. Soft commodities : Coffee, Tea, Sugar
  4. Live-stock : Cattle
  5. Energy : Natural gas, Crude oil

The commodities market in India exist in two distinct forms namely the Over the Counter (OTC) market and the Exchange based market. Derivative trading in India takes place through exchange-based markets with standardized contracts and settlements.

Some of the leading commodity exchanges of the world are:

  1. The New York Mercantile Exchange
  2. The London Metal Exchange
  3. The Chicago Board of Trade

The Indian government has also allowed some commodity exchanges to trade in India. Some of the leading commodity exchanges in India are:

  1. Multi-Commodity Exchange of India (MCX), Mumbai
  2. National Commodity and Derivatives Exchange Ltd (NCDEX), Mumbai
  3. National Board of Trade (NBOT), Indore
  4. National Multi Commodity Exchange (NMCE), Ahmedabad

Without commodity exchanges, it will be very difficult for manufacturers and farmers to sell their products across the country. The exchange acts as a large platform for buying and selling products/ commodities – in effect a great way to market and the products produced.

Commodity futures markets are a part of a program for agricultural liberalization. Many agriculture economists understand the need of liberalization required in this sector. Futures or commodity markets play an important role for achieving that liberalization.

From an investor’s perspective, commodity markets are a great way to trade in large volumes while having few unknown variables. This is why commodities are considered safer investments than stocks or mutual funds.

A growing population demands for more commodities. As the demand for commodities markets increases, the need for traders/ investors also increases. As a country that is on its way to be the largest economy, we are certain that there is a need for many more commodity markets. BSE Institute offers a short-term online course on the Fundamentals of Commodity Trading at BSE Varsity. This course can help any investor learn the nitty-gritty to become an expert commodity trader in no time!!

 

Riding the bulls on the street!

Posted on November 12, 2018Categories Short term programmes   Leave a comment on Riding the bulls on the street!

The Indian stock market is scaling new heights everyday. Volatility is a factor associated with stock markets. However, when the markets are analyzed annually, investors have always to earned a lot of profit. Despite the interest mutual funds are attracting, it is the stock markets which always get the maximum amount for investing. The reasons for it are simple – mutual funds are dependent on the performance of the stock market.

It is really hard to create wealth through bonds, debt investments and normal bank deposits as returns are low and the taxes are steep. For the short/ medium term, equities may be risky but they are the best options for long-term investments. Some investors find investing risky, but it’s actually a calculated risk that they are taking. A calculated risk is one where you have some amount of information available – which makes it easy to predict the final outcome.

Another challenge that most investors face is staying invested when the market falls. What most investors don’t understand is that the stock of a good company is still good even if the markets say otherwise. The company continues to sell the products it has, it continues to have a good market share and it will still have the same profit margin on its products, even if its stock value falls in a bearish market.

It is actually the best time to invest more in a stock when it is priced below market value. By not investing when the market is bearish, you may actually miss an opportunity to get the stock at a cheap price. This is how wealth is created!

One such case of market uncertainty was seen in the acquisition of Gateway Industries. Gateway Industries provides database management and website design services. Gateway Industries is not known to be a bluechip firm. The company traded on the American bourses for 1 cent per share.

In Feb 2011, Robert F.X. Sillerman, a famous media entrepreneur, made an unexpected announcement of acquiring Gateway Industries. He needed a company to fulfill his vision of easy interaction between TV viewers and shows. The price of the stock of Gateway Industries appreciated by over 20,000% to US $2.97 a share. There was however no change in the sales, revenue, profits or market share of the company.

The fact that this company was able to attract a takeover bid at a very low cost highlights the fact that its stock price was highly undervalued.

The investors of the company had an unexpected windfall, without any change in the business model of the company. Many investors who may not have invested considering that it was not a blue chip company or that its share price was not too attractive, missed out.

If you stop investing with the idea that you shall invest when the market improves, you may miss out on a big opportunity. A golden rule to be noted – no one person can ever predict when the markets will rise or fall.

BSE Institute is a 100% subsidiary of the Bombay Stock Exchange (BSE). It aims to train and support students and professionals to become better investors. It’s online platform, BSEVarsity.com offers a course on wealth management which can help investors develop a strong foundation on investment concepts and financial planning.

 

How do mutual fund houses invest your money?

Posted on November 12, 2018Categories Mutual Funds   Leave a comment on How do mutual fund houses invest your money?

“Mutul Funds Sahi Hai – lekin kaise?”. This is one of the most common discussions happening at family and social gatherings! A lot has been said about Mutual Funds on TV and other media, but with a volatile stock market, retail investors are now asking for more details. Is their money truly safe? More importantly, will there be a return of investment and a return on investment?

A mutual fund company is headed by a Fund Manager who is highly knowledgeable and has vast experience in managing or investing in equity and/ or stock market investing. He has a large team of research analysts at his disposal, who work extensively to understand each and every company in a sector they plan to invest in.

They use fundamental and technical indicators to profit from a stock. Stock picking decisions are the most important for any company. Different mutual funds schemes are developed to achieve different investing goals. This is in line with offering different levels of risks, with different financial products. Some amounts are invested in equities and some are invested in debt to protect the company from losses. The stocks chosen by the mutual fund company are determined by the risk taking ability of the fund manager.

Mutual Funds houses and their investment options can be divided into the following:

Index Funds- Index funds are designed to track a specific index. This fund is required to employ a highly passive investment style, as the goals must match with the indexed returns. To achieve this, the mutual fund company invests in the same stocks as the underlying index. Any stock selected by the mutual fund company must be a part of this index. If the stock is removed from this index, the company is forced to sell all the stocks of that particular company.

For example, the Dow Jones Industrial Average (DJIA), the most famous index of all time, is a list of 30 blue chip stocks. The list is made up of a representative collection of stocks. Dow Jones Industrial Average is highly passive as changes are rare. A mutual fund that invests as per the DJIA, can invest only in stocks that are a part of the DJIA. In case a stock drops out of the DJIA, the mutual fund has to sell that stock and invest in other DJIA indexed stocks.

Dividend Funds- These funds are designed to generate the greatest yield possible in a year. In short, they invest in companies that are cash cows, .i.e. companies with a large market share and a big profit margin. Mutual fund companies hand pick the stocks with the best dividend histories, .i.e. with the ones giving the best dividend payouts. To achieve this, they need to stick to companies that have a great track record and have paid dividends consistently.

For example, the Vanguard High Dividend Index is ideal for those who are looking for earning with high yield stocks. The portfolio mainly consists of large-cap value stocks of companies that pay high dividends.

Growth fund- They are built to provide long-term gains by investing in companies that are projected to increase in value over time. Here, the focus is on the companies that are still expanding and are expected to grow exponentially. The choice of stock depends on how the company is expected to expand, rather than its ability to provide long-term sustainable growth. In this case, a lot depends on the ability of the Fund Manager to spot such high growth companies.

In 2018, the largest growth fund was the Growth Fund of America. It has Amazon Inc. as its largest holding. Due to Amazon’s rapid growth and high price to earnings and price to sale ratios, many technology stocks are a major part of all growth funds.

Value funds- They are primarily focused on companies which have the potential to increase in value rapidly. The strategy here, is to select stock which is currently undervalued by the stock market. The primary investment is done in stocks which are undervalued as compared to its competitors. This means the current share price, is low considering the financial health and dividend payment history.

For example, The Clear-Bridge Large Cap Value Fund manages value funds that seek capital appreciation and income through a value-focused investment strategy. They spot stocks that are currently undervalued and can easily multiply in value in just 2-3 months.

The ultimate goal of all mutual funds company is to generate returns for its investors. The investment objectives may vary from investor to investor, but the end goal is always the same. It is therefore very important for an investor to read all documents and fund related details carefully before investing in any mutual fund.

BSE Institute offers a short term course for investors who wish to invest in Mutual Funds. The course – Building Wealth with Mutual Funds helps investors understand the internal working of every major Mutual Fund House. This course will enhance an investor’s knowledge about mutual funds and help them achieve their financial goals.

 

Machine learning can reduce traffic and pollution!

Posted on November 6, 2018Categories Artificial Intelligence   Leave a comment on Machine learning can reduce traffic and pollution!

The use of machine learning and artificial intelligence in autonomous (self-driving) cars for having smooth traffic, reduced fuel consumption and improved air quality may sound like a science fiction, but 2 test projects conducted by the researchers of the Berkeley Laboratory are showing positive results. Applying machine learning for transportation is a new application that is beneficial for both humans and the environment.

Along with UC Berkeley, Berkeley Lab scientists and researchers are using deep reinforcement learning, which is a computational tool used for training controllers to make transportation more viable and environment friendly. The first project uses deep reinforcement learning which will program autonomous vehicles to drive and simultaneously improve traffic flow, which reduces energy consumption.

The second project uses deep learning algorithms to analyze satellite images combined with traffic information from cell phones. The algorithm is tasked with using this data and an environmental sensor’s data to suggest ways to improve air quality.  

CIRCLES (Congestion Impact Reduction via CAV in the loop Lagrangian Energy Smoothing) is the traffic smoothing project led by Berkeley Lab researchers. CIRCLES is based on a software framework called Flow. This software framework allows researchers to discover and benchmark methods to optimize traffic flow. Flow can simulate the driving patterns of thousands of vehicles.

Deep reinforcement softwares are used to teach computers new concepts. It is also used to train computers to play chess or teach a robot to run over an obstacle. These program cars to check activities of the neighboring, so that it will try different types of actions, which include accelerating, decelerating or changing the lane.

By using all these sensors and softwares, algorithms are able to identify a speed which consumes the least amount of fuel, emit lesser greenhouse gases, they are also able to identify the best path for a car to move ahead in consonance with other cars on the road.

Most of the accidents which occur on the road, happen due to a human error. When a car is totally controlled by a software, the possibility of an error is less. These softwares allow a car to be entirely controlled by Artificial Intelligence, thus reducing the chances of an accident.

This ensures that we have

l Less fuel consumption

l Less air pollution

l Less noise pollution

l Less human intervention and accidents

The idea of using computers to drive cars, with little or no human intervention looks fantastic and incredible at this point of time. However, it’s important to note that there was a time when people considered cars a nuisance, but we have still come a long way since then. The same is applicable for AI and Machine Learning. It may sound utopian and outlandish, but it’s an idea whose time has come.

Machine Learning and Artificial Intelligence is here to stay. The real challenge is identifying every industry and sector that can be targeted and disrupted using

Machine learning. It is a technology that is here to stay. BSE Institute’s short term course on Machine Learning is a great option for students and professionals looking to start their careers in this industry. The course explains the technology and its practical applicability, which enables participants to assess and apply this technology in respective domains.

 

India to soon have a $3 trillion wealth management sector

Posted on November 6, 2018Categories Short term programmes   Leave a comment on India to soon have a $3 trillion wealth management sector

Wealth consists not in having great possessions, but in having few wants.

-Epictetus

There are many people in the World who have made a boat load of money, but they are clueless about what they can do with it. Most governments tax individual wealth quite heavily, so traditional savings instruments are really not an option for High Networth Individuals (HNIs).

HNIs need experts who can help invest their millions in financial instruments or other opportunities which can multiply their funds. Wealth managers are the experts who help HNIs multiply their portfolio value.

Wealth management is an investment advisory service that combines financial/ investment advice, accounting and tax services, retirement planning and legal or estate planning for a set fee. These are experts who guide their clients by coordinating inputs from financial experts and can include advice from the client’s own attorney, accountants and insurance agents. Some wealth managers also help their clients to invest in any country of the World.

In short, wealth managers are well networked individuals, who have their fingers on the pulse on every little activity that happens in the financial world. They keep their ears to the ground for any news/ investment that could benefit their clients.

How does Wealth Management work?

Wealth management is a combination of both financial planning and specialized financial services which includes personal banking, tax advice, estate planning, and investment management.

The main motive of wealth management is to build long-term wealth. The net worth required for an individual to qualify for wealth management services may vary across institutions, but typically starts between Rs 20 – 25 crore. The range of services to be offered and the service fee that is charged also depends on the net worth of the individual.

Wealth Management in India :

The management of wealth in India proves to be very tricky for wealth managers. Wealth management for India’s rich, is based on trust and instincts.

Despite this, a boom in salaries and an abundance of HNIs (startups founders and C-suite executives), most wealth managers are quite positive about the prospects of the industry.

According to a report by the Asian Private Banker, India’s wealthy are increasingly rushing to domestic wealth managers for investment advice. Wealth managers have had a bumper year in 2017, with the 20 largest firms managing assets worth $169 Billion – a growth of 63%.

There are three types of wealth management service providers in India – Banks, Brokerage firms and Boutique Advisory firms. The top wealth management companies in India are IIFL wealth and Kotak Mahindra Bank. Other banks such as HDFC Bank and ICICI bank. Non-bank players such as Edelweiss and Centrum are also extremely aggressive in the field of wealth management.

According to Anshu Kapoor, Head of Private Wealth Management at Edelweiss, “Demand is not the problem!”. He made these comments while talking about the amount of funds that are available for wealth managers to supervise. According to him, it is the supply that has to keep up, .i.e. the industry has a dearth of talented wealth managers.

The industry is poised to manage funds in excess of $3 trillion of personal invest-able wealth by 2022. This is in line with the projections made for the Indian economy – which is on its way to have a double digit growth rate by 2022.

Thus, the Indian financial industry is going to witness an exponential growth in the demand for wealth managers in the coming decade.

BSE Institute provides short time online courses for all candidates on BSE Varsity who wish to learn about wealth management. The Institute’s course on Introduction to Wealth Management helps you learn everything about Wealth Management in just 4 sessions! This course aims to help smart professionals and investors take charge of their portfolios and grow it faster. The course also helps students and other executives to learn more about building a career in wealth management.

 

Z+ security needed for financial data

Posted on November 5, 2018Categories Data analytics   Leave a comment on Z+ security needed for financial data

The World has seen a huge increase in the number of cyber crimes, cyber-frauds, ransomware attacks, identity thefts. Recently Facebook was believed to have been a victim of a hacker attack that resulting in over 50 million users getting locked out of their accounts. India has not been immune to this. We read about many cyber crime cases where many hapless users lose money from their accounts. The amounts that people have lost are in crores. Hence, it has become necessary to build an infrastructure that can protect data and can pro-actively prevent these attacks.

India being the second most populated nation in the world, generates a large amount of data. Data regarding financial transactions, shopping patterns, travel habits, etc, can be easily used by criminals to create transactions and bank transfers that look legitimate and are difficult to trace. As India is a populous country, it is very easy for criminals to cover their tracks in a mountain of data.

A lot of money that is stolen using frauds is used for nefarious activities such as drug smuggling, human trafficking and other illegal activities. Hence, it has become very important for all banks, tech companies and the RBI to come together and combat cyber criminals.

As per RBI guidelines, all financial institutions and fintech companies are required to store their domestic transactions data within India. The objective of localizing data is to ensure that all the personal and private data related to is stored within the country. This will ensure the safety and security of the Indian payment ecosystem. There are possibilities of non-state actors targeting companies with this data. It is tough to keep an eye on this data when it isn’t in your country. With this RBI’s directive, that consumer data will be available in India itself.

This mandate was welcomed by major Indian fin-tech companies, such as Paytm, Freecharge and PhonePe, but it has not gone down well with other global finance companies. Due to the RBI’s directive, Visa and Mastercard, two global payment giants, have started storing financial data locally. Experts believe that this move will bring our country’s financial system under the complete control of the RBI. This is sure to put the country on a path to build strong cyber defenses.

China, Russia, and North Korea have already adopted the strategy of storing data locally within their country. They have adopted suitable measures to ensure the safety of information.

Complying with this data directive will be tough for many international finance companies as they operate in over 200 countries. Not all their functions/ tech teams sit in the same country and hence it will be difficult to localize each and every process. Consider this – a lot of Facebook’s servers are located in the USA, Ireland and Finland. To consider building an infrastructure to support their business and store all the data in all 200 countries will be a tough task. It is quite possible that they may cease operations in some. However, that is where the Indian advantage comes into play.

With a huge population, it is impossible to ignore India. Thus, most tech and finance corporations will soon comply and implement the directives of the RBI. This is turn is bound to create new job roles in many corporates.

BSE Institute’s GFMP Edge Certified Data Scientist program helps develop the skills needed for machine learning and data analytics. With the RBI’s directive, there will be a requirement of data scientists and analysts who will be needed to monitor and manage all financial transactions.

With BSE Institute’s data analyst certification program, one can understand analyze the structure of data-sets and databases, including big data of large financial data-sets which is used for marketing and other business functions.

 

Solid or speculative?

Posted on November 5, 2018Categories Financial Markets, Global finance   Leave a comment on Solid or speculative?

Let’s face it – investing in the stock market is tough, for every disciplined, successful investor there are over a lakh unsuccessful investors who invest on the basis of speculation. A lot of investors find investing scary too! Knowledge, discipline and a control of your emotions are necessary to invest and get great returns. The key to successful investing is understanding why companies raise funds and how do they earn their revenue.

A company needs money for their growth or expansion. They may need to invest this for research and development, for hiring new employees, for marketing, for building storage facilities, etc. They release shares to the general public, who can buy these for a predetermined price in a process known as Initial Public Offering (IPO). A company’s shares need to be listed on a stock market, like the Bombay Stock Exchange (BSE). A stock market allows investors to buy and sell shares at prices they believe are correct.  

Coal India Limited, India’s largest coal producing company, has raised over Rs. 15,100 crores by selling 631.6 million shares, or 10% stake through its IPO at the issue price of Rs. 245 a share. This was the largest IPO in India.

Investors continue to trade the stock of the company even after IPO. It is because the value of the company changes over time. An investor buys a company stock, not because of what it is worth today, but what it will be after sometime. A lot of investors fall prey to speculation. People keep their ears open for speculative tips, hints, etc, which could drive the price of the stock up. However, what most investors don’t realize is that they need to read and understand balance sheets and profit/ loss statements to actually understand how a company is doing.

An investor needs to understand the industry the company operates in. He need to understand the competition, the other ancillary industries which influence the business, etc. What good investors do is they study each and every detail of the company and compare it with its competitors (national and international).

This process of studying every single detail before investing in a stock is known as Fundamental Analysis. It is believed to be one of the safest way to invest as an investor will have the entire set of data based on which he/ she can take a calculated risk. This is the fundamental which forms the bedrock for great investing. Warren Buffet has been quoted saying “An investor must invest assuming that the markets could shut down tomorrow and reopen after 10 years.”.

An investor who is able to judge the quality of a company and its management on the basis of its reports, is able to invest successfully in a bull and a bear market – as a good company is still good even if the stock market crashes.

BSE Institute brings you a course on Wealth Management, which will help you learn the nature of financial markets and the various opportunities that are available for building a solid investment portfolio. The objective of the course is to help professionals, housewives and investors develop the discipline and skills necessary for investing independently.