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March 2, 2017

How Digital Money Transfer affects Cash Management System in SME Banking

digital money bankingIn the recent years, there has been a surge in the number of e-commerce startups. This has resulted in a higher usage of payment gateways. These gateways are beneficial in developing customer trust through easier transactional capabilities.

A large number of studies show that the demand for reliable payment gateways will continue to rise. Businesses may choose from several gateway service providers to ensure safe, quick, and easy monetary transactions.

Digitalization of different processes, new payment platforms, and demand for finance provide challenges and opportunities to payment ventures operating in India. Here are four reasons for the growth of payment gateways in the country.

1. Increase in service providers that are taking advantage of opportunities with advanced technical apps
2. Extension of financial inclusion using mobile-based solutions
3. Newer innovations that are reaching the masses at quickly
4. Digitalization for the development of new lending and payment models

Traditional banks are adopting innovative payment-linked ecosystems for the convenience of their customers. Banks are especially providing specialized solutions for catering to the needs of the Small and Medium Enterprises (SMEs).Several mobile platforms allow payments across different categories, such as bill payments, shopping, and peer-to-peer payments.

Most of the large companies have adopted digitalization since many years. These companies conduct their various processes, such as accounts management, treasury management, and payments electronically. Such large enterprises consider advanced technologies while selecting their banking partners.

Importance of digitalization in the SME sector

In the last few years, most banks have developed cash management systems that are convenient for their customers. Almost every bank offers mobile-based cash management tools that are used by companies for not only managing their accounts but also initiating payments.

As larger companies embrace digitalization, the SME ventures still rely on cash and branch banking. The banks are offering several initiatives to encourage SMEs to move to digital platforms. One of these includes enabling merchants to receive card-based receipts using low-end mobile devices. This offers a non-cash alternative for several SME businesses. Another initiative benefiting many customer-orientated companies is the Immediate Payment Service (IMPS) that makes transacting quick, transparent, and efficient.

Banks are offering several cash management services to help SMEs improve operational efficiencies. Here are four categories of such services offered by banks.

1. Management

• Optimal collection and payment systems on behalf of customers
• Wide network access, clearing infrastructure, special software, and correspondent banks’ tie-ups for timely and efficient operations

2. Products

• Receivables management
• Information technology (IT) solutions for customized multiple electronic payment mechanisms
• Collection of cheques in bulk
• Cheque purchasing facilities
• Management of post-dated cheques

3. Payable management

• Refund of Initial Public Offerings (IPOs), interest and dividend warrants
• Bulk demand draft with entire correspondent banking network
• Remote printing of different instruments including cheques

4. Escrow services

• Availability of escrow depository accounts
• Dedicated team of legal and financial product personnel for assisting complex transactions
• Transaction structuring with lawyers, clients, or investment bankers
• Customization of reports and Management Information System (MIS) as per customer requirements

Streamlined processing mechanisms and real-time data integration make it easier for SMEs and large companies to gain access to various solutions as per their needs.

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January 18, 2017

How to Open a Savings Account

creating a savings accountA savings bank account is where most people begin their journey of savings. There is no safer place than a bank to store your money. It also pays you for keeping your money there in the form of interest. But, there are several banks around and each have their own benefits, so before you open a savings account decide a bank to go to. Following are steps on how to open a savings account –

– Select a bank

Inquire about banks that are situated in your locality. Better will be to research about them online as there is an abundance of information available online. Each bank will have a distinctive service and offer, decide which one’s best for you. Important points to consider is the presence of the bank and their ATM networks. Also remember that you will be needing several services of your bank at random hours so there has to be an availability of online and mobile banking as well. Be it physically or digitally, your bank should be within reach all the time.

– Check out their website

If you like a bank then go ahead and check out their website and find out more about their services. You can check out each and every service of theirs by just sitting on your desk. The advent of mobile and online banking has made life convenient, also ATMs can be accessed 24/7 making banking simpler and hassle free. Plan your visit to the bank on weekdays at 9.30 a.m. to 3.30 p.m. and on Saturdays at 9.30 a.m. to 1.30 p.m. Banks remain closed on Sundays and other public holidays.

– Type of account

Although we know that we’ve to open a savings account, there are several types of savings account out there catered specifically to match your needs. Some options are Easy access accounts, Basic savings accounts, Joint savings accounts, Women’s savings accounts and Youth account. Best option for you will be to get in touch with bank representative and ask for details.

– Keep information ready

To open any savings account you will have to submit certain documents and information to the bank. This is a norm that is followed by all banks, some banks will require more information and several documents will be asked, it will be better if you keep these documents handy.

– Depositing your opening amount

Several banks require a minimum amount deposit to open a new account. The amount depends on the bank, some may have a greater minimum amount deposit and same may have none. Find out these details in advance and have the amount ready when you’re about to open a new account.

– Read and understand the terms

Do not hesitate to ask questions, you should be clear about each and every aspect of the account. Also read the information available online on the bank’s website, inquire about service charges, benefits and services available on the account.

– Sample signature

You will asked for a sample signature while opening your account. This signature will be used in all of your future transactions related to the account, like withdrawing money or signing a check. If there are noticeable differences in your signature then the transaction won’t be permitted. This a procedure done to keep your account safe and to avoid any issues with the signature, you can practice it on a piece of paper for several times.

– Account opened!

Congratulations, you’re now a valued bank customer. After the verification of your form and documents, your account will be opened. You will receive a welcome kit from the bank that will include important information about your account like information leaflets, cheque book and customer relation number. The kit may also include your debit card, with the pin number, also attached will be your net banking and phone banking pin.

With the advent of technology on the banking front, you can also opt for online account opening, the procedure is easy and the steps are hassle-free.

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March 28, 2016

When is the correct time to begin investing in mutual funds?

mutual fund investmentsPicking mutual funds for investment is easier than picking the right time to invest in them. We give you five hints to help you choose.

Every investor knows that in order to make money, he must put the money he currently has to good use. Simply letting the money sit in the bank or investing it in such instruments as real estate and gold do not always yield the best results. Besides, if the investor has both short term and long term goals, he may need to look at mutual fund investment.

But despite wishing to invest in mutual funds in India, many factors can hold an investor back. In terms of mutual funds, ‘how’ is often not as important as ‘when’. Consider these five pointers to help yourself decide when to invest in mutual funds:

1 When you do your research.

You must be willing to put in hours of study on both the fund you are interested in and the fund house. Choosing the best mutual funds cannot be a snap decision, and it cannot be based on the current favourite in the market. The fund you purchase must offer the potential for growth that you seek to realise your short term and long term financial goals. Apart from the fund, you must select the right fund manager as well. Conducting due diligence is the crucial first step to investing in the best mutual funds in India.

2 Study the fund manager’s record over three years.

Investors are often tempted to see short term results of the fund manager they wish to work with. However, experts will tell you that any amount of time short of three years is too less to analyse the manager’s performance. Analyse his track record over three to five years and discuss the various strategies he has adopted over the years vis-à-vis market fluctuations and asset allocation.

3 Choose a manager with the same investment style as yours.

A fund manager is not a magician who can convert your mutual fund investment into piles of money. Nor is he a mathematician who follows provable theorems with predictable outcomes. A fund manager studies the markets and interprets them every day, and bases his decisions on his understanding and skill. The gains may be slow in coming in some cases, while another of his decisions can fetch a windfall. However, his investment style must align with yours, or there may be conflict in reaching your fiscal goals.

4 Pick the fund of the best available ones.

Studying market forces every day and picking the right mutual fund is important for the proper realisation of your financial goals. Most people tend to go with the popular choice, or expect a long term fund to generate constant growth in the short term. Discussing the fund’s growth with your manager regularly, reading reports by financial companies and looking up the workings of the best mutual funds relays valuable information.

5 Be certain that it is the best way to create wealth.

Investing in mutual funds is a matter of faith and being open to a little risk. Sometimes, all calculations can go awry and mutual funds may show extremely low returns. Hence, it is important to be convinced about the decision to invest in a mutual fund. Only when the investor is certain that they will give the best returns will the investor be confident about putting in his money in them.

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October 4, 2013

How To Get a Better Money Transfer Deal

piggybanks_2033319bWhether you are importing goods from China or buying an overseas property, you will want to know that you got the cheapest money transfer deal. You may have already planned popping into your own bank to arrange the necessary transfers, but did you know that they won’t offer you the best deal?

The truth is that high street banks are one of the most expensive ways to arrange a money transfer. It’s a much better idea to use a specialist foreign exchange company. They will have access to a higher rate than your bank and can also give you advice on the best way to transfer your money. Let’s take a look at those facts in more detail.

1. Expensive Bank Rates

By using a foreign money transfer service you could make typical savings of 5% compared to transferring the same amount with your own bank. That’s because a specialist money service has access to exchange rates that are very close to the Interbank rate – this is the rate that the banks use to lend money to each other. When you use a foreign money transfer service you get access to live rates and not the static rates that the banks set each morning. As a first step, compare exchange rates online so you can be sure of getting the best deal when you transfer your money overseas, especially when moving around large sums of money.

2. Benefits Of Using a Foreign Exchange Specialist

Not only will you get access to the best rates when you call a non-bank foreign exchange company. You will also get access to the best service and advice. Because exchange services focus on one specific aspect of finance, they have an excellent grasp of what is happening in the currency market and will aim to get you the most beneficial deal on your transfer.

3. Smart Forward Thinking With a Forward Contract

If you know you are going to be transferring regular sums of money overseas, it makes sense to consider a forward contract. Worrying about fluctuating exchange rates can keep you up at night when you are transferring large sums, but with a forward contract, your rate is set in stone for a set period of time – that period is usually 12 months. During this time you can enjoy that exchange rate and the extra money it can give you compared with the current exchange rate if there are adverse currency fluctuations.

4. Shop Around Online For The Best Transfer Deals

It really does pay to shop around for most things online and money transfer deals are no exception. The good news is that you could find the best deal for your situation and currency in moments when you use an online comparison site. Don’t always assume that the first deal you find is the best deal even if it is listed at the top of your Google search results. When you are transferring hefty sums of money around it pays to spend a few minutes, or indeed hours, researching the most beneficial rate.

5. Make Sure Your Currency Company Is FCA Accredited and Regulated

Of course, you need to be sure that any money transfer company you use is legitimate and authorised to be carrying out such transactions. Any UK payment services company that is transferring money and which is not regulated by the FCA is breaking the law. These regulations provide customers with a high level of protection and therefore it pays to look for an authorised company.

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October 21, 2012

Pros and Cons while using Internet Banking

Almost everything has become available online since the rise of the internet, and from apartment hunting to food shopping, going online has become a daily aspect of people’s lives. It quickly became apparent that banking customers should be able to access their finances online instead of having to find the nearest ATM for a statement, and thus internet banking was born. Some people were sceptical, and others wholly embraced the technology, but there was no doubt that internet banking was the future.

Nowadays, nearly 70 per cent of banking customers are registered to manage their finances online, and there are many reasons why internet banking has emerged as a staple of everyday life. Apart from being safe, convenient and secure, online banking is available 24 hours a day,and you can also transfer money to a friend or loved one whenever you want. Furthermore, online banking allows you to access your statement anytime you like, and from the comfort of your home. Here’s a list of the pros and cons of internet banking compiled by the people who love and hate it the most.

Pro – It’s Cost Effective

Internet banking means that you don’t have to travel to your nearest branch or ATM machine to access your finances. That means that you’re reducing your carbon footprint, especially when you think how many times you would have to travel every month to see your finances if internet banking wasn’t available. Furthermore, internet banking means millions of customers can be served at the same time, meaning less queues in branches, and more happy customers.

Pro – It’s Paperless

One of the most important advantages of internet banking is that it is paperless – gone are the days where your monthly statement is posted through your door! Banks have reported to have saved millions of pounds in printing since the introduction of internet banking, and many have donated a proportion of their savings to sustaining the green environment.

Pro – Easy Loan Applications

Before internet banking, customers who wanted to apply for a loan or IVAshad to make an appointment with their local bank. Depending on where a person lived, that could be a long journey, and even worse, some banks couldn’t provide appointments until months after the initial application. Nowadays, people who are registered for internet banking can simply apply for a loan online! In just a few clicks, a customer can fill in some details and get an answer to their loan application in a matter of minutes.

Con – Bank Relationship

Internet banking may be convenient, but customers used to be able to build up a trusting relationship with their bank manager. If personal circumstances changed, people could ask to talk to their account handler and explain their financial situation. Apart from providing the customer with peace of mind, bank managers could use their discretion in changing the terms of an account to help a person with repayments. However nowadays, this relationship has been lost.

Con – The Internet

This may sound simple, but what if a banking customer does not have access to the internet, or they are blind? In these circumstances, a person will have to go to a bank directly and organise their finances in person.

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