Should you pursue a mid-career management program?

Posted on July 30, 2020Categories General   Leave a comment on Should you pursue a mid-career management program?

When Albert Einstein was a professor at Oxford his students once asked, “Dr. Einstein, aren’t these the same questions as last year’s physics final exam?” to which the wise professor replied, “Yes, but this year the answers are different.”. Change is the most fundamental driving force behind human evolution and he who denies it or cannot keep up with the pace will inevitably be left behind. The problems of today cannot be answered with the practices of yesterday. You may have joined an elite B-School in the early 2000s but let’s just take a moment to appreciate how much for instance the financial markets have changed in that very duration. Since the early 2000s, a string of events has defined new age practices in the field of wealth management and risk management.

From the get-go, we had problems like the war on terror which put otherwise safe risk management practices like heavily investing in oil and natural gas at significant crosshairs on a global scale. The more famous example happens to be the 2008 financial crisis which saw significant market disruptions. For example, investment practices have shifted from personal capital investments to safer options like mutual funds and crowdfunding.

Among the many lessons the current pandemic has taught us, one is the importance of being relevant in the market right now. Not only are young recruits not been taken, but mid-career individuals are also at a loss with how to not only better their position but retain the same. Under these circumstances, polishing one’s skillsets in particular domains. Now obviously we have to take into consideration the practical limitations particularly during the onset of this crisis where it is impossible for one to go attend evening classes.

Online courses have been the norm for quite some time now, not only does it save a lot of time and energy on the part of the person undertaking said course but it also helps them get the individual un-diverted access to world-class courseware which otherwise would have been difficult to attain. The sole reason this deserves a consideration currently is because of the severe changes happening to the financial markets in the current days and the changes in wealth management, general management, and risk management practices that the professional might witness.

A particular observation that many career specialists around the world which in start dissent with the majority opinion happens to be the idea or the will to promote a fixed mindset instead of a growth mindset. Career planning should be given more attention than to just hold on to a job and allow oneself to be shielded from the opportunities that they fail to even recognize. It is a strategic step that the more mature choice makers will incline towards. A reason why a certain field like wealth and risk management requires their most experienced practitioners to through online management courses is because of the ability of such programs, the reason being the heavy influx of technology the goes into the functioning of the financial markets of today. This has resulted in an assessment of the skill gap and a mid-career management online program is certainly one of the most alluring opportunities that mid-level managers must undertake to be relevant in the market. In the wild west of the corporate jungle, if one cannot constantly upscale then he shall become obsolete which is not an amicable situation for any employer or employee.

With all that being said, going through such a course is not merely about learning a skill or two or about being up to date and market-relevant. Another thing that is of tremendous importance is the sheer networking opportunity such convergent platforms boast of. It is arguably one of the, if not the best step you can take to advance your career to greener pastures.

Why is upgrading one’s skills post COVID important?

Posted on July 29, 2020Categories General   Leave a comment on Why is upgrading one’s skills post COVID important?

The coronavirus outbreak has led to a recession in the world economy. The Global finance market is experiencing high volatility. The unemployment rate has increased rapidly amid pandemic, raising career concerns. The second wave of coronavirus in major economies of the world can further delay the recovery. The current situation caused by the coronavirus is expected to end with the invention of vaccines for COVID-19 but the financial damage caused by coronavirus will take years to recover.

However, this tragic situation gave people an opportunity to experiment with new work systems such as work from home, the digital transformation of operational activities etc. And the changes which have come out successful are expected to become the new normal post COVID. Many companies have experienced a shift in its network operation. They have transferred their controls online and enabled their employees to work from home. Also, few companies are aiming at building a resilient operating system that is less vulnerable to future pandemic alike situations. While the restructured system is expected to be more resilient and technology-driven, it is important for employees working in any organization to upgrade their skills accordingly to endure their career.

With a large proportion of staff working from home, it is a humongous task for the team leaders to coordinate them. It is one of many changes that are caused by COVID-19. The newly adopted systems are immature and are expected to cause several problems in the functioning of an organization. To assess this type of situation, people with risk management skills are important. So people with strong leadership skills who can drive the workers remotely, this is the best time for you to hone your leadership skills. You could take an online course on management that would act as a catalyst for building your leadership skills. An online management course in a reputed institution can provide assistance via industry experts and case studies that would help you to manage the risks when encountered in a real working environment.

Apart from this, the opportunity created by the pandemic should be utilized too. For example,

COVID-19 has brought big changes in the human lifestyle and his resource consumption. Since most of the firms find the decentralized work culture to be as efficient as the conventional one and more profitable at the same time, the changes in the work-culture are going to last. This is expected to bring a change in investment patterns in stock exchanges. The market trend is anticipated to take a shift from its long driven course. Hence, investment in the right industry would prove beneficial at this time. Also, this is the best time for people who were waiting to enter the stock market domain. But it is advisable to invest some time in learning the skills needed. You could acquire the skills related to the stock market by pursuing stock market courses. The knowledge gained via stock market courses will be helpful in analyzing capital markets and investing accordingly.

But, the current pandemic has shut all educational institutions indefinitely and they are highly unlikely to be opened until the situation gets better. However, people have continued their education by switching to digital platforms of education. This had led to a surge in the number of enrolments in online courses during the COVID-19 lockdown. As the online courses are gaining more acceptance among the recruiters, students and workers have started updating their résumé with valuable certifications via online courses. Especially, the online courses accredited by Educational Institutions have found more credibility among the employers. Apart from that students will be introduced to a new era called the digital education revolution. Considering the perks of online education, it is expected to play a significant role in the future too.

 

Is Data Science a fad or a solid industry?

Posted on March 17, 2020Categories General   Leave a comment on Is Data Science a fad or a solid industry?

14There have been numerous articles on the internet about how fascinating Data Science is the sexiest job of the 21st century but of course there is a catch. The draw of a career in this field is undeniable — it is in demand, pays well, and has a right mix of technology, statistics, and business. People with industry experience are able to climb to the top with ease. However, this industry is currently in its nascent stages, so one must be careful before jumping head in.

This blog will give you necessary insights about the future one can have in the field of Data Science.

  1. High Demand

Data scientists have taken the top spot in Linkedin’s analysis of most promising jobs because of its 56% year on year growth. A study showed that 70% job postings in the world are for data scientists with less than five years of experience. Also, the job seekers have more opportunities because very few people have the skill set required to be successful in this field.

  1. High Salaries

Data scientists are making more money than people in other fields. This is because of the skills and the important role that data scientists play in a company. A study showed that a Data Scientist makes a average of Rs 10,00,000 Lakhs/ annum. This is one of the biggest pro of being a Data Scientist. Since it allows companies to make smarter, informed decisions, it gives them an important place in the company. Most importantly, there just aren’t enough Data Scientists available out there – which is why people can command large pay packages.

  1. Versatility

 The major benefit of Data Science is that these skills are needed and used in every sector right from e-commerce, automotive, health care and many more. You will not be stuck in an industry forever – as there are many sectors which need your skill set. For instance, the advent of machine learning (ML) signaled significant improvements in the health care sector, with one of the most significant applications being the detection of early-stage tumours.

  1. Challenging Work

Becoming a Data Scientist is a combination of Mathematics, Statistics, Computer Programming and Strategy. Since there are new innovations in technology everyday, you must also be updated about it. Moreover every project demands a different strategy and thought process.

It is these four, which primarily push an individual to develop and evolve at a rapid pace. Having knowledge about multiple industry sectors, numerous skills and the ear of senior management, is something which one can only dream of.

This is one rare industry which lets you do it all!

BSE Institute is a 100% subsidiary of BSE India, the world’s largest stock exchange. We provide various courses for individuals right from the college students to the managers in the executive suite. BSE Institute’s GFMP Certified Data Scientist Program is a 4 month course designed specially for freshers and college students to gain skills to be a Data Scientist. They can opt for well paid jobs right after they have completed their education.

4 trends that will soon dominate the banking sector

Posted on March 12, 2020Categories General   Leave a comment on 4 trends that will soon dominate the banking sector

We are witnessing a new technology/ application/ process taking shape every few months. Sometimes, one wonders if the methods used today, will continue in the 6 months to come. Banks and Financial Organizations give short notices to individuals to implement new rules and regulations. Being in the loop of major developments is important, as it could be the difference between the success and failure of a BFSI firm.

Banking in 2030 is going to be very different from what is it today. Many companies including Facebook and Google have launched payment applications. A technology company will soon be a part of retail, finance, telecom, and many more.

It is said that 2020 will be the year when we get clarity on the future of Big Tech. Fintech, financial technology, is making a large impact on the banking system – and this includes consumers of all ages.

Let’s have a look on how some of these trends may play out in the coming years

1. Tech companies drive deeper into Banking

Multi National Corporations (MNCs) launched new age products/ services in 2019 to disrupt the financial sector. This was just a tip of the iceberg.

Apple launched the Apple Card with Goldman Sachs in August. Facebook announced Facebook Pay, a payment mechanism that works with Messenger, Instagram, WhatsApp and Facebook, in November.

Big Tech companies have started lending to small business’, as a lot of banks are not lending to them, or are lending with too many conditions. Amazon lent an estimated $1.5 Billion to sellers in 2017 and $1 Billion in 2018. Every quarter PayPal makes more than $1 Billion by extending working capital loans with 70% of them in areas where banks have shut down their branches. Square Capital has made $5.5 Billion by offering loans in the past five years.

Facebook has planned to launch a cryptocurrency payment network in the next year with its digital asset, Libra.

2. Banks and Fintechs prioritize providing customer insights

Banks and Fintechs are very close to providing the perfect solutions to customers and at the right time. Back in 2019, the Hunnington Bank launched ‘Heads up’, a software that gives customer advice on achieving financial goals.

Upcoming bill due dates and spending activity will be notified by an alert on the app. Subscription payment alerts may notify a customer about the charges or when a free trial has ended. Customers are also notified in case they have been double charged for something by someone. The insights are provided by a software, which uses predictive analysis to analyze data transactions and spending habits to provide valuable insights to the customers.

3. Banks find additional ways to partner with Fintechs

HSBC Bank had launched a digital lending platform last year which was built with Fintech. These partnerships are expected to grow as the banks look to capture the digital lending space in 2020.

A large number of online lenders have started licensing their softwares to banks. In order to provide better and efficient services to customers fintech leaders are to tie up with banks across the globe.

Amount is licensing loan origination technology to various banks including Banco Popular, TD Bank and Regions Bank. On the other hand Blend is working with BMO Harris bank and others to offer in auto loans and provide an insightful customer experience.

Fintechs are quicker to understand the consumer lending niche and improve customer experience with fast funding of the loans.

4. Data – the biggest flash point!

There have been mild conflicts between Fintechs and banks over customer data as both of them need data to perform important tasks. A number of partnerships and recent industry initiatives with the motive of stabilizing data sharing practices advised that the solutions were near. However this year could see a conflict between Banks and Fintech over Data sharing.

A recent conflict between PNC Bank, PayPal and the data aggregator Plaid created tensions as some customers lost access to Venmo, a third party payment application.

The banks have now installed a data aggregator that will improve data security. Banks claim the customers have no idea what they are agreeing to when the give permissions to certain apps, hence these aggregators helps them collate data and secure all consumers jointly.

These are a few trends which are shaping the way for the Trillion Dollar Banking and Finance industry.

This blog was written purely to give you a brief understanding of the ongoing trends in the global banking sector. How does one stay ahead of the curve? For those wishing to build a career as financial journalists, BSE Institute offers multiple courses to help you build a career in front of the camera.

BSE Institute is a 100% Subsidiary of BSEIndia world’s largest Stock Exchange which offers over 150 finance courses to enhance your knowledge in the Financial sector.

The Executive Program in Financial Journalism a perfect mixture of financial concepts and live case studies, to help you build a rock solid foundation in finance. This course is taught by senior professionals and is purely industry driven. Enroll now and give wings to your career.

11

Is IBC really a success?

Posted on March 11, 2020Categories General   Leave a comment on Is IBC really a success?

How many times have we read about companies going bankrupt? There maybe multiple reasons for this to happen but the company has to pay off creditors the funds they owe. Creditors too may have to take cut in the amount that they shall receive from corporates.

 

This process usually takes a lot of time. The IBC (Insolvency and Bankruptcy Code) was introduced so that these processes are carried out within a set period of time and as per law. This law was passed specifically to ensure that banks and other creditors are able to recover all outstanding amounts from corporates in a time bound manner.

 

Wikipedia defines IBC as the Code that outlines separate insolvency resolution processes for individuals, companies and partnership firms. The process may be initiated by either the debtor or the creditors. A maximum time limit, for completion of the insolvency resolution process, has been set for corporates and individuals. For companies, the process will have to be completed in 180 days, which may be extended by 90 days, if a majority of the creditors agree. For start ups (other than partnership firms), small companies and other companies (with asset less than Rs. 1 crore), resolution process would be completed within 90 days of initiation of request which may be extended by 45 days.

 

Let us see how the IBC has performed in the first few years of its existence.

 

3312 cases have been offered to IBC so far out of which 1961 are ongoing. 780 cases have resulted in company dissolution, 381 have resulted in a withdrawal of appeal, and 190 are closed by resolution. 780 companies were shut down by the IBC in order to maximize value and get back the credit extended. 780 companies have gone out of business due to the IBC.

 

There is no proper data available to come to a conclusion about job losses due to company closure, but we can make an informed guess. For a company with a turnover of Rs 200 crores, the average number of employees are around 3000-4000. Therefore, for every Rs 1 crore of turnover approximately 20 employees lose their jobs.

 

So far the creditors have claimed an amount of Rs 8.19 Lakh crore, but have been able to recover only Rs 1.73 Lakh crores. A difference of almost Rs 6.46 lakh crores! Can we term this as a success of the IBC? This is after the resolution of some of the biggest cases of IBC.

 

The 7 biggest cases of IBC are Electro Steel, Bhusan Steel, Monnet Ispat, Essar Steel, Alok Industries, Bhusan Power & Steel and Jyoti Structures. These are the biggest cases in terms of the company size and the outstanding amount. However, these amount to only 1% of the total outstanding. Even though they amount only to 1%, but they contribute to the 65% of the total recovery by IBC. If we exclude these 7 cases the recovery is only 10%!

 

When we talk about the liquidated cases, only 51 cases have reached the final stages. The creditors had claimed Rs 9,870 crores and only about Rs 96 crore was receive. That amounts to even less than 1% after a year’s headache.

 

An objective of the IBC was “balancing interest”. By this they mean one must balance the interests of various stakeholders. There is no data in order to measure this and to come to a conclusion. However, a glance at the newspapers tell us about the various inter-creditor issues plaguing the IBC process. The whole process is stuck due to infighting among various creditor groups, which results in no progress.

 

For SMEs, where the loan size is less than Rs 200 crore, and the SME has 3,000 – 4,000 employees, resolution professionals are unable to successfully run these companies due to a lack of industry knowledge. This usually leads to company closure and job losses.

 

Whichever way we look at it – the IBC has not helped banks and businesses in the manner envisioned. A lot of banks have lost capital, interest and goodwill. Many people have lost jobs, many operational creditors have lost a lot of capital. After this first phase of IBC, the question is whether this route for collection of funds is truly worth it? At the end of the day, if a business is able to recover just 10% of what another business owes them, then it’s a major write off for them!

 

The last word is yet to be said about the IBC. What is has done, is forced unscrupulous promoters into clearing all their dues. There are many cases which are not referred to the IBC and are resolved by bankers and operational creditors. At the end of it all – it is all about risk management.

 

The question is whether a person or a company can recover their dues by their own skill or by the IBC. This is what Risk Management is all about! How do you find the best way to insulate your business from any type of risk. Can you forsee these risks before they come? Do you have a solution for them? If not, your business can go from hero to zero very soon!

 

BSE Institute, a 100% subsidiary of BSE India, the world’s fastest and the largest stock exchange, offers advanced business and finance courses for freshers and working professionals. The Executive Program in Risk Management, is designed to help professionals identify and tackle risks.8

If you think Wealth Management is not important, think again!

Posted on February 25, 2020Categories General   Leave a comment on If you think Wealth Management is not important, think again!

When it comes to finance every individual has the same goal i.e to be financially free to pursue anything that they dream of. Reaching a point where you don’t need to worry about your finances need not be a long and a tough journey. A lot of people struggle with their finances due to improper planning. You can achieve financial freedom with the help of a financial advisor who helps us and guides us with everything or by learning financial planning on your own.

Wealth management experts can help you design a financial plan with which you can manage your money in a way that keeps you comfortable – by multiplying your money. In this blog, we attempt to understand the importance of wealth management techniques and their benefits.

Investopedia defines wealth management as an investment advisory service that combines other financial services to address the needs of affluent clients. It is a consultative process whereby the advisor gleans information about the client’s wants and tailors a bespoke strategy utilizing appropriate financial products and services.

Importance of Wealth Management

 

We spend our lives to earn enough money so that we and our loved ones can live a happy life. Sometimes only savings are not enough to do that. It is important to make strategies to meet your financial goals, keeping inflation in mind. Wealth management does that for you. A wealth advisor formulates strategies in a way that will help you reach almost every financial goal through investing.

Unless you have a financial strategy, it is very difficult to meet your financial goals. It is important to identify and understand your financial strengths and challenges. Wealth Management experts help you to design a plan and execute it. This will ensure the financial security of you and your loved ones.

Benefits of Wealth Management

 

  1. Financial Plan

 

Wealth Management helps you create a financial plan which is most suitable for you according to your needs. Wealth managers have the perfect skills and knowledge to meet the requirements of their clients. They use their skills to create the perfect plan for achieving all your financial goals. They put in a lot of time and effort to properly design a financial plan for you.

 

  1. Eliminate financial stress

 

Wealth advisors have a deep understanding of financial problems and their solutions. With a thorough knowledge of the markets, they know how a portfolio must be tweaked during the ups and downs. They change the plan according to market conditions leaving you stress free. They are the best people suited to manage your funds in any type of market – without you getting stressed about it.

  1. Personalized service

Wealth management differs from person to person. There is no fixed strategy. A wealth manager has to weigh the pros and cons everyday and then design a strategy which suits his client. In order to get the best results, one must share everything with their manager. A wealth manager’s plan is to consider your financial goals and then build a wealth management plan.

  1. Relationship based approach

Wealth managers put your financial needs and expectations on top. They help you to make better investments decisions. They communicate with you and exchange their ideas and views. A wealth manager truly benefits only when he works with the same clients for a longer term. Short term projects never work for an advisor, as they earn more when the portfolio they manage multiplies.

Wealth management is extremely important – as one cannot work for their entire lives. You need to rest after a certain age. Wealth managers are professionals who work to build portfolios for people who wish to retire early. To do this set realistic financial goals. What would you do if you have the power to plan your own portfolio? Would you like to have that power?

BSE Institute, a 100% subsidiary of BSE India, Asia’s oldest and the world’s largest stock exchange. Our Executive Program in Wealth Management is a course designed specially for managers looking for an opportunity to boost their careers. The course is taught by senior industry professionals , who have served as heads of finance and marketing in large MNCs. Enroll now!5

Insurance is your best assurance!

Posted on February 3, 2020Categories General   Leave a comment on Insurance is your best assurance!

17102040447_d4be49424c_bOne moment is enough to turn your life upside down!

Life can sometimes take an unexpected turn and everything can change in a fraction of a second. We cannot stop untoward incidents from happening or anticipate them. However, the one thing we can do is get protection, anticipating a mishap. Insurance is designed to protect us financially in case of a disaster happens.

 

Investopedia defines insurance as a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients’ risks to make payments more affordable for the insured.

 

Alden Wecker an Assistant Editor at LearnVest shares her story which tells us how important insurance is. Alden was only 3 when her father had passed away in a plane accident. Her mother was a housewife at the time and was out of the workforce for 9 years. The life insurance her father had helped her mother in the funeral, lawyer fees for executing her dad’s estate, a mortgage, living expenses, private school or child care and to pay for two college tuitions. If her father didn’t have life insurance her mother would have never managed to pay off all these expenses. This is how important life insurance is.

 

There are over a dozen of types of insurance. Every insurance policy has its own benefit. Not everyone needs all the types of insurances. You have to choose insurance according to your family income, children, employment and the expenses you have. There are four types of insurances that most financial experts recommend for individual investors. They are life, health, auto and long-term disability. Each one of these covers a specific aspect of your life and each one is very important to your financial future.

 

  1. Life Insurance

 

Life insurance is very beneficial for your loved ones rather than you yourself. It is very important if you are the sole earning person in your family and your whole family is dependent on your income. Many insurance experts suggest that your life insurance policy should be 10 times of your annual income. This amount will help your family cover the existing expenses and any upcoming expenses as well.

 

There are two types of basic life insurances, Whole life and Term life. As the name suggests term life insurance is only for a specific period of time and whole life is the one where you pay premium for your whole life. There is a considerable difference between both these policies. You must take many factors into consideration like age, occupation, number of children etc. before choosing the policy.

 

  1. Health Insurance

 

Wikipedia defines health insurance as an insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over numerous people. By estimating the overall risk of health care and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for health care benefits specified in the insurance agreement.

 

Health insurance is important as medical expenses can take away all of your savings in the blink of an eye. To improve the awareness and better health care facilities in India, Insurance Regulatory and Development Authority (IRDA) of India and The General Corporation of India runs health care campaigns for the whole population. In 2018, the Honourable Prime Minister Narendra Modi, announced the launch of a new health insurance, for under privileged citizens. The Government mentions that the new system will reach more than 500 million people.

 

  1. Long-term Disability Coverage

 

This is the type of insurance many of us think we will never need it yet according to statistics every 4 out of 10 people will face disability at some point in their life. Now some may say they have life and health insurance which will help them in the future, but health insurance only covers the medical expenses. How are they going to cover their daily expenses when they are not able to work for weeks or months. This is where the Long term Disability Coverage kicks in.

 

Most of the policies cover about 50-60% of your income. Many factors such as age, lifestyle and health are considered while calculating the cost of Disability Insurance.

The premium may vary from one policy to another depending upon the benefits to be gained from the policy. If you want a higher monthly gain, the premium would be much higher and vice-versa.

 

  1. Auto Insurance

 

Auto Insurance is insurance for carstrucksmotorcycles, and other road vehicles. Its primary use is to provide financial protection against physical damage or injury resulting from traffic collisions and against any mishap that could also arise from accidents in a vehicle.

 

Auto insurance in India is a compulsory requirement for all new vehicles used whether for commercial or personal use. The insurance companies have tie-ups with leading automobile manufacturers. They offer their customers instant auto quotes. Auto premium is determined by a number of factors and the amount of premium increases with the rise in the price of the vehicle.

 

These are the 4 types of Insurance that one must definitely have for a stable and secure life. Consult your financial advisor, before choosing the best policy for you and your family!

 

They say that education is the best investment – for its compounded returns are so great, they cannot be measured. BSE Institute, a 100% subsidiary of BSE India, the world’s largest stock exchange, offers multiple finance courses for individual investors and students to learn from. The GFMP Financial Markets Program is a 4 month course designed to make young students, fresh out of college, a credible authority in the field of finance. The course is industry driven and is taught by senior industry professionals. Hop on and get ready to take a ride in the world of Finance. Enroll now!

Five Steps of the Risk Management Process

Posted on January 21, 2020Categories General   Leave a comment on Five Steps of the Risk Management Process

 

 

What is risk management?

Risk management is the identification, evaluation, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunity.

 

Why is risk management important?

Risk management is important because it tells businesses about the threats in their environment and allows them to be prepared for them. In the absence of risk management, businesses would be blindsided by risks and face heavy losses.

 

Risk can come from both internal and external sources. The external risks are those that are not in direct control of the management. These include political issues, exchange rates, interest rates, and so on. Internal risks include non-compliance or information breaches, among several others.

 

Here is an example of how a manufacturing company adopted a risk management company to manage their risks and saved their 5 Million euros. Different factory units need regular maintenance. During the maintenance work the production has to be shut down, which causes a reduction fall in the company’s income and profit. Szigma Services Ltd. was handed over the risk management process. Szigma services analyzed the risks that the manufacturing company was facing and provided them with solutions accordingly. After implementing the solutions the manufacturing company saw the difference in their production units and also the reduction in losses.

 

What is the risk management process?

The risk management process is a portfolio of the actions that need to be taken. There are five basic steps that are taken to manage the risk. It begins with identifying risks, goes on to analyze risks, then it is prioritized, a solution is implemented and finally the risk is monitored.

 

Step 1: Identify the Risk

 

The primary first step is to identify the risk in the business environment. There are a number of risks – legal risks, environmental risks, political risk and many more. It is very important for an organization to identify as many risk as possible. Being able to identify what types of risks you have is vital for every business organization.

 

An organization can identify their risks through experience and internal history, consulting with industry professionals and external research. Many companies have now hired risk management professionals to identify the risks for them.

 

 

Step 2: Analyze the risk

 

Once the risk has been identified it needs to be analyzed. It is important to understand the link between different factors of the business and the risk itself. To determine the threat of the risk it is important to figure out how many business functions are affected by the risk. Sometimes a risk is so vital that it can bring a whole organization down, whereas some risks may not even affect the organization.

 

When a risk management solution is implemented the first basic step is to place the risk according to different documents and business processes. This means that the system will already have a method which will identify the risks and their impact.

 

Step 3: Evaluate or rank the risk

 

After the analysis it is important to rank and prioritize the risks. Every risk management solution has different categories of risk depending upon the damage to be caused by the risk. A risk that may cause little inconvenience is ranked as a low-level risk whereas risks that can cause tremendous loss are rated high-level. It is important to rank risks as it will help get a better view as which risk is to be handled closely. Certain low-level risks can be managed by minor changes whereas the high-level risks need good thinking and proper implementation of solutions.

 

Step 4: Treat the risk

 

The most important step after analyzing the risk is to eliminate or contain the risk. This is done by connecting with the experts of the fields in which the risk exists. In a risk management solution all the major stake holders are sent notification about the risks. The discussion regarding the risk and its possible solution must be discussed with the stakeholder and acted upon accordingly. The upper management must follow up with the stakeholder after suggesting the solution.

 

Step 5: Monitor and review the risk

 

The final step is to review the risk. All the risks cannot be eliminated, some risks are always there in the organization. Environmental and legal risks are just two examples of risks that always need to be evaluated. The risk management system evaluates every risk of the organization and any change in the risk is notified to everyone.

 

BSE Institute’s Executive Program in Risk Management is a course designed to give you thorough knowledge about risk management. Risk management is vital for every organization as one risk left unidentified can bring down the whole organization like a house of cards. Managers who are finding ways to jump up the ladder can stop looking as this course is just the right step for them to boost their career. Join now!

 

 

 

Investments – Spend some today, earn more tomorrow!

Posted on January 7, 2020Categories General   Leave a comment on Investments – Spend some today, earn more tomorrow!

Being a good investor is all about education. The more you learn the better you get. There are a large number of investment options but not all of them are good for any one person. It varies from individual to individual according to their goals and risk taking ability.

 

Investing is putting money to work. You can invest in an underlying security which puts those funds to work, with the goal to generate profits over time.

 

Here’s an example of an individual who started investing at the age of 77 and how he built a fortune in just 12 years. The money he invested has reached a number where his invested income was more than the income he earned in his entire life. The gentleman worked for the Central Government of India and retired with a two bedroom flat. His portfolio of investments included some investments in the stock market. He invested in markets when they were 2,600. They compounded his money at a rate of 13% per annum. The markets have now grown to 11,000 points over a 12 year mark. If he had invested Rs. 10,00,000 then after 12 years the amount he received was Rs.43,34,523.

 

Most investors implement strategies to minimize risks and losses. However, they may formulate the strategy in such a way that it can result in no risk at all. Putting all your money only in low-risk instruments can have guaranteed returns, but those returns may not be enough to meet your financial goals on time. If you’re wondering which instruments could best complement your low-risk investments, here are a few options you might find helpful :

 

  1. Equity mutual funds SIP

Investopedia defines mutual funds as a financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments and other assets. Equity mutual funds are one of the easiest ways to earn a better return on investment (ROI). They are managed by qualified asset managers who focus on securing huge returns while minimizing the risk. The easiest way to invest in an equity fund is with a Systematic Investment Plan (SIP) – which lets you put in easy monthly installments.

 

  1. Direct equity investments

Investing directly in stocks is risky but can give you outstanding returns if you select the right stock and have proper knowledge about the stock market. For direct equity investments, you need skills like fundamental analysis, technical analysis and you also need to stay updated with the latest market trends and news. Invest directly into equities only if you have a high risk appetite and the necessary skills.

 

  1. Unit linked plans (ULIPs)

Wikipedia defines ULIPs as a product offered by insurance companies that, unlike a pure insurance policy gives investors both insurance and investment under a single integrated plan.Unit Linked Plans (ULIPs) are managed by professionally skilled managers from insurance companies. ULIPs allow you to switch between equity and debt assets. Apart from ROI, they provide insurance cover as per the applicable policy terms. ULIPs come with a lock-in period of five years.

 

  1. Real Estate

Real estate is a versatile investment tool for long-term investments. It offers rental income as well as capital gains benefits apart from providing you a roof over your head. Home loan repayments also offer several tax benefits under laws. To invest in real estate, you need a long-term investment approach and the stomach to stand by market fluctuations.

 

  1. National pension scheme (NPS)

If your investment view is for a very long-term (more than 5 years) and you are also looking for annuity income after retirement, NPS can be an excellent option. It allows you to switch investments between debt and equity assets. The scheme encourages people to invest in a pension account at regular intervals during the time of their employment. After retirement, the subscribers can take out a certain percentage of the fund. As an NPS account holder, you will receive the remaining amount as a monthly pension post your retirement.

 

While increasing your exposure to high risk investments, it’s important to diversify your investments across various instruments to reduce the overall risk. You need to keep a beady eye on your investments and its growth. If an investment is about to make losses then you might want to cut if off rather than bear the loss. However, investing your money properly can help you achieve your financial goals.

 

BSEInstitute’s GFMP Financial Markets Program is designed to help young students grasp the intricacies of finance faster. The course is specially designed with a 4 month structure to allow students to understand the nitty gritties of finance and get placed right after college. It will help the student gain an in-depth knowledge about investments and other financial activities. This will also help students invest their money better and get better returns. Be an investment expert in just 4 months. Join now!

 

 

 

 

Senior finance jobs to be wiped out by AI

Posted on January 7, 2020Categories General   Leave a comment on Senior finance jobs to be wiped out by AI

Rapid change and growth in technology has resulted in the increasing use of robots in all sectors. Robots have replaced a lot of jobs on Wall street and now they are coming for higher ups in the finance sector. The increase in the use of technology and the manner in which we depend on it has made this happen. The speed and the precision with which a robot can function is far better than that of a human. Additionally – it can work for 24 hours a day, 7 days a week without any lunch and salary.

 

Financial Technology (Fintech) is basically any new technology which is used to manage and improve the financial tasks of an organization. Fintech helps business owners and consumers manage their task efficiently, work faster and save time by using specialized software.

 

The best example is Robo Advisory and Stock Trading Apps. Robo Advisors have disrupted the asset management sector by providing algorithm based recommendations and portfolio management services that have increased efficiency and lowered costs. Before stock trading apps, a trader had to go directly to a stock exchange like BSE & NASDAQ to buy and sell stocks. However, now they can buy and sell stocks with the tap of a finger.

 

Artificial Intelligence (AI) is a collection of advanced technologies that allows the machines to sense, comprehend, act and learn. It is set to transform businesses by changing the way they run, compete and thrive. These technologies will eventually help reduce costs, improve productivity and create growth opportunities.

 

According to the testimony of Marcos Lopez DE Prado, a Cornell University professor and the former head of machine learning at AQR capital Management LLC, the execution traders’ jobs have been automated. The people who model prices and risk or build investment portfolios have been displaced due to algorithms which can do the same in a short period of time.

 

Lopez DE Prado stated that due to the increase in financial learning a large number of people are going to lose jobs. This is not because they are being replaced by machines but because they have never been trained to work alongside an algorithm.

 

The main issue here is that people have been using their own ways to manage their finances rather than using a specific algorithm. The adaption may take time but a robot is pre-designed to work according to the algorithms.

 

Kirsten Wegner, chief executive officer, Modern Market Initiative states that with the change in AI it is vital for the financial regulators to have the funding, technological capacity and access to AI to be strong and effective.

 

With algorithms being adopted, the main problem a company faces is the number of changes it has to make in order to automate work. The two main problems it faces are the financial investment and the technological adaptations needed.

 

Martin Rejsjo, head of NASDAQ Surveillance North America Equities claims that NASDAQ runs more than 40 different algorithms, using about 35000 parameters to look for market abuse and manipulation in real time. The rapid growth in market data is a significant challenge for surveillance professionals as market abuse attempts have been increasing and it is difficult for surveillance teams to find them.

 

NASDAQ has developed algorithms to identify cases. Similarly there are algorithms for every financial service being offered by different companies. They are designed in a way to work faster and provide better results than a human being.

 

Rebecca Fender, Senior Director, CFA institute states that in future around 43% of the CFA members expect their roles to change. It is most likely to happen because of better algorithms, which indicate trades that are more likely to make profits.

 

Thus, there are many new developments in technology which give better corporate results. In future, these algorithms are going to be more efficient than human beings themselves and might replace them eventually.

 

BSE Institute’s GFMP Edge Fintech Professional Program provides an in-depth knowledge about the latest new trends in Fintech. Our 4 month course will help students be conversant with this brand new technology. Fintech is the future for every industry imaginable. Be a part of this rapidly evolving future and give a boost to your career by joining now!