Machine Learning Promises to Shake Up Large Swathes of Finance

Machine-Learning – Compliance/Risk Management/Prevention of Fraud

Machine-learning has been enhancing in fields right from trading to credit assessment to fraud prevention. It has begun shaking up finance wherein a subset of artificial intelligence –AI tends to excel in locating patterns as well as making forecasts, which it utilised in preserving the technology firms. Towards 2019, those seeking to aspire being a `chartered financial analyst’ or desire distinction in the industry would be requiring, AI proficiency in order to be successful in his exams.

 Machine-learning, regardless of the uncertainty of several inclusive of some `quant’ hedge funds which tend to specialise in algorithm based trading, is said to be poised in having great impact. New fintech firms together with some quick officials have begun applying the system to everything right from scam protection to discovering new trading policies, capable of up-end not only of the labour of the back office but also the more honest glamorous stuff.

 Machine learning has already been utilised for task like compliance, risk management as well as the prevention of fraud. A British firm known as `Voice’, tends to sell machine-learning driven speech transcription tool to huge banks in order to monitor the phone calls of traders for any indications of wrongdoing lime an insider trading.

Near Actual Tracking – Risk Disclosure

The other specialist such as Xcelerit or Kinetica seem to provide the banks as well as investment firms with near actual tracking of any risk disclosures enabling them to display their capital needs constantly. Machine-learning tends to surpass in noticing strange patterns of operation that may display fraud. Start-ups firm such as Feedzai – for payments, or Shift Technology – for insurance to behemoths like IBM have been providing these services and some have been developing the skills internally.

A British banking start-up – Monzo had built a model, swift enough for stopping the would-be fraudster from implementation of a transaction thus bringing down the fraud rate on its pre-paid cards in June 2016 from 0.85% to less than 0.1% by January 2017. The natural-language processing wherein AI-based system have been released on text, has begun to have a great effect in document-heavy portions of finance.

JPMorgan Chase, in June 2016, had organized software which can scrutinize through 12,000 commercial-loan contracts within seconds in comparison to the 360,000 hours the lawyers and loan officers tends to utilise in reviewing the contracts.

Automated Financial Decision

Besides this, machine-learning is also said to be good for automated financial decision irrespective of assessing credit worthiness or eligibility for an insurance policy. Zest Finance being in business of automated credit-scoring right from its foundation in 2009 had earlier in the year rolled out a machine-learning underwriting tool to support lenders in making credit decisions as well as for people with little conventional credit-scoring information.

It tends to scrutinize through huge amount of data like the payment history of people or how they seem to interact with the website of lenders. A tech savvy insurance start-up, Lemonade, has been utilising machine-learning to sell insurance policies as well as to manage claims. The latest boundary for machine-learning probably is in trading wherein it is utilised to bite on market data and also to select and trade portfolios of securities.

At Goldman Sachs, the quantitative-investment strategies division tend to utilise language processing motivated by machine-learning in order to go through thousands of analyst’s reports on the companies. Here it complies an aggregate `sentiment score’, depending on balance of positive to negative words. Goldman had also invested in Kensho which is a start-up utilising machine-learning in predicting how events such as natural disasters tend to affect market prices centred on data on similar events.

Restricted Useful Applications

A Toronto-based upstart, Castle Ridge Asset Management has attained annual average returns of 32% since its establishment in 2013. It tends to utilise a cultured machine-learning method such as those used in modelling evolutionary biology in making investment decisions. The chief executive, Adrian de Valois-Franklin, claims that it is very sensitive that it picked up 24 acquisitions before they had even been announced.

On the other hand, Man AHL, which is a well-established $18.8bn quant fund provider, had been conducting research in machine-learning for the purpose of trading since 2009 as well as utilising it as one of the techniques in managing client money since 2014. Martin Lueck of Aspect Capital seems to find the system exaggerated stating that his firm had observed only restricted useful applications for the same. However in other fields machine-learning has the possibilities of game-changing and there is no reason in expecting finance to be changed.

 As per a machine-learning fund manager, Jonathan Masci of Quantenstein, years of work on rules-based approaches in computer vision, telling a computer on how to recognize a nose for instant were instantly eclipsed in 2012 by machine-learning processes which enabled computers to `learn’ what a noses looked like from examining millions of nasal pin-ups.

Likewise a machine- learning procedure, according to Mr Masci has to beat conventional trading strategies depending on rules set by humans.

How will GST Impact the Indian Real Estate Sector

Impact of The Goods & Service Tax - GST 

The most ground-breaking tax connected reforms in some decades to be seen in India is the Goods and Service Tax – GST that will eradicate the incompatible as well as mounting taxation arrangements which have confused various industries over the last few decades.

 It would positively tend to have a deep effect on the economic prospects of India. An individual indirect tax covering the goods and services would tend to increased tax collection in the long run by making it simple for retailers together with many other businesses in complying as well as regulating the overall taxation stages. The favourable outcome of this new taxation administration would only become apparent within 2-3 years after its implementation.

 In spite of the announcement of the tax structure of the goods and services tax – GST, a lot of speculation would be there with regards to tax rate being applicable to the real estate as well as construction industry. It would be untimely to comment at this point of time since the tax rate has not yet been decided. Prospects for the real estate would be in the bracket of 12% but the GST rate does not seem to be the only significant element.

GST – Tax Neutral/Tad Adverse

It is a known fact that real estate sector tends to play a vital part in employment generation in India and ranks second after agriculture. The significance of real estate segment is comprehended with its average 5-6% GDP contribution as well as stimulating demand for over 250 subsidiary industries.

The real estate segment is said to have a considerable growth of about 22% in its private equity reserves from 2015 to 2016. During the third quarter of 2016, there was an increase of 9% in investments for residential properties from previous quarter.

The reduction rules for developers applicable under service tax system together with the input tax credit facility would be determined if the effective tax incidence on real estate would be lower or higher under GST. Meritoriously the composition system enables reduction against the cost of land up to 75% of the cost of the house for residential units at a price under I crores IND and less than 2000 sq.ft. tends to make the effective rate at 3,75%.The reduction in other cases seems to go below 70% thus making the effective rate at 4% which will go a long way in defining whether GST would be tax neutral or tax adverse in the case of real estate.

Uncertainties to Rental Housing Market

Some clarity on reduction for under construction houses as well as input tax credit benefit for developers has been offered by the government. Considering the residential property sector, the sales have not only been obstructed by tax rates but also by sentiment as well as on account of the trust deficit that the Real Estate Regulation & Development Act or RERA, it now seeks to report. Under GST, if cost tends to go higher, the lower prevailing current home loan rates to some extent could ease the impact.

Investors and buyers together with the developers are reasonably anxious that the final ticket size of the homes would escalate if the Government levies GST at 12% as against the prevailing service tax rates. Further clarity on this is anticipated by the developers though they are aware that it is in the interest of their business in keeping ticket sizes range-bound.

Developing market dynamics have already made a change in a way the developers tend to work. Other uncertainties relate to the rental housing market that would logically be the obstructed if the Government tend to tax residential leases under GST.

Rental Profit/Capital Value Appreciation

The common anxiety is that should this occur, the rental housing segment would see a big slump over the medium-term as residential leases are not taxed at all presently. It is appropriate to note that the residential leasing could be an essential demand that would not disappear just by increased taxes.

 Undoubtedly, we could be viewing at rental lack of progress or marginal decline while the market readapts to the new dynamics that GST would permeate. Rental housing demand however tends to be sticky and end-user-driven in nature. Hence we are certainly not watching for major slump in this sector due to GST even if it does not tend to tax residential leases.

Nonetheless it is true that most of the investors in the residential segment do not tend to invest for rental profit but for capital value appreciation and so reduced rental profits would not freely control sentiment. With regards to the impact of GST on the commercial office real estate market, with the prevailing service tax for commercial leases at 15%, GST overall would be probably neutral.

Presently reasonably priced housing has been exempted from service tax and it is possible that the government would come out with a clarification with regards to the applicability or tend to continue the exemption under the GST.

How Can I Enhance My Company's Conversion Rates?

One of the business owner's primary concerns is determining how to optimize the company's conversion rates. If you're currently thinking about strategies you can implement to enhance your organization's bottom line, it's important to remember that there are hundreds of options available to you. Here are three of them:

1. Utilize Consulting Services.

One of the best ways to improve your company's conversion rates is by utilizing business consulting services. These services will ensure that you have a team of business experts carefully analyzing every element of your company to ensure that it is functioning optimally. Any errors detected will be corrected so that your organization can maximize efficiency. Once this happens, you can expect to see a substantive increase in your conversion rates. Companies such as Predictive Service are pleased to offer clients dynamic reliability consulting services to keep their organizations going and growing.

2. Invest In Digital Marketing Services.

In addition to utilizing consulting services, make sure that you start investing in digital marketing services. This step is immensely important because we now live in a digital world. Given that people are now using mobile devices and PCs to shop and purchase items online, you want to be able to connect and convert people through the internet sphere. Some of the digital advertising services that may prove particularly beneficial for your organization include:

• web design and development

• social media optimization

• online reputation management

• search engine optimization

• blog work

Another digital advertising service that can be particularly beneficial for your organization is content marketing. This service is empowering because it ensures that all of your online content is innovative, information-rich, and engaging. Some forms of online content that you'll want to optimize include blog posts, web articles, and videos.

3. Implement Customer Relationship Management (CRM) Software.

One final conversion rate optimization technique that you may want to implement is the use of CRM software. This software helps your sales and marketing staff optimize interactions with customers, thereby increasing the likelihood that they will make purchases and be loyal to your brand. For example, CRM software enables your employees to keep detailed records of each conversation they have with clients as well as the purchases made by the customer. This information will help them market new products more effectively!

Don't Delay: Start Optimizing Conversion Today!

There are millions of things you can do to increase your company's bottom line. Three conversion optimization strategies you may want to consider implementing include utilizing consulting services, investing in digital marketing services, and implementing CRM software!

GST not to increase compliance burden, says Hasmukh Adhia

GST Not to Increase Compliance Load

Hasmukj Adhia, Revenue Secretary has informed that the GST would not increase compliance load on assessees, regarding the same are misdirected. He had stated while addressing netizens on Facebook that several people are of the opinion that the implementation of GST would end in increase in compliance cost which is totally misplaced.

 While explaining the basis he had said that people need tto keep various law books for the purpose of filing return for different taxes such as VAT, Excise etc in the prevailing taxation system. He went on to added that with the roll out of GST, there would be individual tax as well as accounting for which it would be quite easy.

It could be done via an offline excel form provided by the GST Network and if one intends to utilise this form for the purpose of maintaining record on the purchase and sales, he could utilise this for filing return and hence compliance would be reduced. Adhia leading the implementation of the Goods and Services Tax – GST had mentioned that the finance ministry has been gearing up for its roll out and a training comprising of five days has been already given to the officers.

GST to Be Implemented in July

He has also informed that an IT training is in the process for them. The intention of the government is to implement the GST from July 1 and the GST Council controlled by Finance Minister, Arun Jaitley had settled four rate classifications of 5%, 12%, 18% and 28% on merging levies such as central excise, service tax and VAT.

 Addition would be done by calculating the overall incidence of present taxation - central plus state levies and thereafter placing the good or service in the tax bracket nearest to it. Adhia also informed that the indirect tax load would come down in the new GST system. He said that there would be several goods and service that would be out of GST and would therefore offer advantage to common man with regards to taxes and the roll out GST would be tax neutral or there could be decrease of tax burden.

Regarding traders, he also informed that the tax filing would begin from the starting point level of Rs 20 lakh where the registration below the inception limit would not be essential.

No Harmonized System of Nomenclature 

He also informed that under PAN within one state only one registration would be permitted. For one business, no other registration would be permitted though there would be a need of single registration with regards to supply of production for more than one state.

For the purpose of coding, he mentioned that no Harmonized System of Nomenclature – HSN code would be needed in case of business turnover of Rs 1.5 crore. The Revenue Secretary also mentioned that on petroleum as well as alcohol products under GST, would not be under the new tax system till the time the GST Council tends to impose a rate. He added that in the near future, if the state agrees then petrol, alcohol together with natural gas would be coming under GST.

The Benefits of a 360 Degree Employee Survey

Let's face it, you don't always like getting feedback about your job performance. Even when you know it's coming, it can be hard to face the truth from your fellow employees. Add the process of taking a survey and it becomes even less appealing. You would think that great leaders are the best people at getting feedback, but this is definitely not the case.

Think about who gets told the most what they are doing wrong at your company. If it's anything like most other businesses, the higher you go up the totem pole, the less feedback you are going to get. Thanks to all of this, a 360 degree employee survey can be a huge benefit to your company. Here are just a few of the reasons why.

1.  Puts how over what - Just because an employee is getting all of their work on time doesn't necessarily make them a great employee. They need to be doing it in a way that benefits both them and the company without cutting corners or taking the easy way out. One thing this type of survey does is ensure that each employee is following protocol correctly in their daily tasks because an organized company is a healthy company. 



2.  Accountability - Everyone at a company should be held accountable for their job in the same way. Just because you have been promoted and advanced to a higher level in the company doesn't mean that you aren't held to the same high standard that you were when you were new.
    



3.   Performance Enhancing - One great thing that a survey does is remind people of what the job requires, especially helpful for long-time employees at the business that may have grown stagnant and bored with their job. The survey can act as a refresher course that inspires them and makes them perform better in the future.
   
    
4.  Improves Intra-office Relationships - Employees that are open and honest with each other build trust and the best way to do this is through an open dialogue.
    

These are just some the reasons that a 360 employee survey can be beneficial to both a company's leadership and lower-level personnel. Those looking into having a survey done at their place of business should contact a professional consulting group like Key Group Consulting. They have the knowledge and facilities to complete a survey for a company of any size.