2019 Banking Industry Outlook 6 themes driving banking industry trends counting the Costs of a Data Breach

 

Banking And Technology

For 2019 and past, banks must contend with many issues engaged to regulations and legacy systems, upsetting models along with technologies, new challenge, and an impatient customer base while chasing new techniques for lasting growth. Our 2019 Banking Industry Outlook inspects the six macro themes from customer centricity to cyber risk facing all the industry’s five primary business portions in the coming twelve to eighteen months. Companies that can address these issues opportunities to effortlessly balance long-term goals with short-term performance pressures might be amply compensated.

There is considerable opportunity for banking institutions on the coming year, but lasting development will probably rely on navigating 6 dominant themes.

The banking industry comes in 2019 having a fresh air of careful confidence among clouds of policy doubt. Today, the clouds have cleared a little. For banking institutions around the globe, 2019 might a crucial year for accelerating the change into more strategically minded, digitally connected, and operationally agile organizations better equipped to maintain market leadership in an ecosystem that is rapidly evolving.

But this present year also promises multiple challenges, including complex and diverging regulations and legacy systems, troublesome models and also technologies, new competitors, and an often restive customer base with ever-higher anticipations. For banks’ 5 company lines retail banking and corporate banking, capital areas, payments, and wide range management 6 broad themes might be particularly critical for sustainable long-term development into the coming twelve to eighteen months:

Customer-centricity: True customer centricity is certainly a Holy Grail for banking institutions, which have made notable strides in moving away from sales-dominant countries. But clients objectives are evolving at a much faster speed, many thanks in particular to the superior experiences they enjoy with other industries. Being alert in experience delivery is as essential today as aiming at right areas as well as right consumer segments with all the ideal resolutions.

Financial Technology and Banking

Fintechs and techs are going to have a very strong impact on banking in the near future . Banking institutions can learn from fintech firms, which have set a benchmark that is new surpassing customer objectives in financial services. Fintechs have changed the direction of innovation in banking. However, incumbent institutions that are financial likely to keep their dominance offered their scale of operations, regulatory barriers to entry, and customers’ reluctance to change. That does not mean that banks should lean on their market laurels, but just the opposite. Rather, they are able to discover techniques to improve the customer experience. Banks could reproduce just what fintechs are doing, collaborate with them, or obtain them. Moreover, banks could take an expansive view of competitive benchmarking to consist of the most beneficial in class fintechs along with big tech companies.

Tech Administration

Technology administration. As much as banks may wish they might, discarding legacy systems just isn’t an option. Modernizing the main generally seems to be considered a concern on par with buying a profile of new technologies for example Blockchain as well as robotics and intellectual automation. There exists a lot to be done, as well as it is not going to be easy. Banks can aim to strike a balance between retaining competitively differentiating activities in-house as well as others that are externalizing. By 2020, technology units inside banks will possible start making changes by themselves from running platforms to arranging technology information flows across most of the stakeholders.

 

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The Successes and Failures of Fintech

The global fintech market is characterised by a booming digital payments industry valued at $3,403,168 million in 2018, with a total transaction value projected to increase by 13.2% by 2024. Among the largest sectors of the fintech industry are the personal finance sector and the burgeoning Robo-Advisors sector. According to market research (Research and Markets), the total market’s transactional value for 2019 through 2024 is forecast to grow at a compound annual growth rate (CAGR) of 8.6%. Fintech’s rise to prominence was facilitated to a large degree by the failure of central banks and established financial systems following the global financial crisis. A growing demand for workable financial solutions, structures and frameworks yielded innovative fintech solutions for improved efficiency, better management, and enhanced cost effectiveness.

Financial Tech Companies

The leading financial technology companies have set the standards high, with ambitious objectives aimed at solving real-world problems. Sometimes these incubator solutions have prospered, at other times they have failed. The rationale for ongoing R&D into Fintech solutions is to replace redundant, expensive financial frameworks and entrenched systems with leaner and more efficient solutions. Fintech’s advances have not been without the occasional stumbling block. One such area of concern is small business lending. Predatory pricing techniques and invasive business practices have tarred this particular segment of the fintech industry. Greater regulatory compliance and oversight are needed to establish credibility among users.

Challenges Ahead for Sectors of the Fintech Industry

So, what’s really going on in the Fintech space? What are the notable failures and what are the possible bright spots on the horizon? It appears that the most significant losses are attributable to banking companies and online lenders. Several big-name enterprises like CAN Capital, OnDeck and even Lending Club have suffered acute losses, as reflected in their stock prices. For example, LendingClub Corp stock has dropped from over $25 per share in 2014 to just $3.60 per share today. This begs the question: Why are online lending companies failing while traditional financial institutions are enjoying incremental growth? An interesting insight is provided by acclaimed investor, J. Christopher Flowers. His analysis of fintech companies is revealing. Fintech companies don’t follow the narrative of financial companies. Fintech is geared towards massive growth and dominance in double-quick time. Financial enterprise is typically slow and steady, with incremental growth over time.

Funding For Technology

With tech funding, investors plough huge amounts of money into new ventures with a short-term perspective. In financial circles, trust needs to be built, reputations established, and market penetration achieved. All of these things take time to process. With fintech it’s about who gets to market first in a rush for dominance. Fintech enterprises in the online lending industry are all about pushing sales, first and foremost. Proof of this dash towards rapid growth and dominance in the online lending market is evident in the high cost per click with keywords on Google. To cut a long story short, advertising campaigns with many online lenders are geared towards growth at all costs. By working with established fintech enterprises, fintech newbies fall into the trap of stagnation. The reason d’etre of fintech is disruptive technology, while incumbent enterprises are set in their ways. This makes it rather difficult to gain traction.

Fintech Success Stories to Rebalance the Scales

Fintech has a place in today’s fast-paced world, particularly in areas where clunky processes hamper the efficiency of important business functions. One striking example of fintech at work is in the area of global payroll payments processing. Payroll costs are a major bugbear for companies all over the world. Global payroll operations across multiple territories and jurisdictions typically cost companies substantial sums of money and they are associated with significant security concerns, legal complexities, and compliance-related issues. Fintech companies offering sophisticated solutions in the form of automated payroll processing solutions are having an impact on the profitability and efficiency of company operations. Many companies have touted solutions for global payroll, but only a select few generate the types of results that are needed to validate their adoption. The hallmarks of effective global workforce management platforms are cost-reducing solutions, fully automated payroll systems, and full compliance with GDPR. By eliminating email dependency in the payroll function, it is possible to improve data security and coverage for employees and the company.

 

A big part of the inefficiency problem with global payroll management is compliance. Each country, territory or jurisdiction has specific rules in place regarding payroll management. With automated payroll solutions, compliance is guaranteed. Thanks to local verified experts in place, it is easy to enjoy complete control and transparency of all payroll-related activity. Automated payroll solutions run on autopilot, without any complexity. By connecting with local suppliers, companies can enjoy best-in-class payroll management through secure, efficient and compliant payroll solutions. Many other promising areas are ripe for fintech development. Innovative technologies are giving rise to systems, products and services making it easier to manage finances for businesses and individuals, secure payments channels, and facilitate greater efficiency across the board. Digital banking is slated to double in size within a few years, and mobile payments are expected to reach $275 billion by 2021 (Statista). Various other fintech fields are being cultivated, including biometric banking identifiers, insuretech, regtech (fintech regulatory compliance systems), blockchain, and concepts such as ‘Social Money’. Each of these fintech markets is enjoying substantial investment, and adoption of these new technologies is quickly gaining traction.

The Future of FinTech

The future certainly looks bright for fintech and all its applications. New developments are being brought to market at breakneck speed. While some concepts will inevitably fail, but offer solutions to existing challenges.

 

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US Dollar Still Ahead of other Currency Markets

The US dollar has been outdoing other currencies for a while now. While other countries are being bombarded by economic struggles, the US economy seems to be standing firm on its own.

Volatility prices are decreasing at a rapid rate, which is forcing the US to consolidate. Meanwhile, the Dow Jones Dollar Index is reporting an upward surge in the US greenback when compared to other currencies such as the Australian dollar and the Japanese Yen. As the US dollar continues to stay on top of other currencies, binary option like Scam Watchdog is making sure that dealers in foreign currencies have the right information when it comes to their security.

 

Asian Currencies

Asian stocks received some encouragement based on the positive report given by the US Federal Reserve. The Feds painted a positive picture of the country’s performance in the past and leading up to the present. Asian stocks rose base on positive performance that the US is expecting to continue generating growth for the rest of 2015 and leading into 2016. The Japanese Nikkei rose 1.2 percent while shares on the Australian market went down 0.7 percent.

Asian Pacific shares went up 0.4 percent and this is showing a certain level of confidence in the US economy. In this week, the greenback rose to its highest gain to 0.1 percent when trading took place on the Asian exchange. The dollar traded at 124.075 yen.

The euro went down 0.2 percent and stood at $1.0964. The fall of the euro might be a reflection of a strong risk appetite, which is being used as a currency to fund risk assets investments.

In the US, positive inflation and housing data led to an outstanding performance by the country’s currency. Since the information about inflation and housing was revealed, Janet Yellen who is the Federal Reserve chairperson hinted that it might be time to lift the country’s interest rates sometime down in the year.

 

New Zealand Currency Ranks High With the Dollar

New Zealand’s currency was the only bright spark when compared to the US dollar. The Kiwi currency went into recovery mode after slumping for six years with an amount of $0.6498. The recovery brought a sense of relief to financial analysts in the market. An acceptance therefore came about among key players in the economy that the finances of the country are picking up at a rapid pace. The fast growth of the Kiwi economy is causing a concern among big financial players in the economy and thus there is now a move on by government to cut interest rates to facilitate growth.

 

Since the US dollar has shown an increase over the past week, dollar bulls are investing in the country’s currency in an effort to snatch greater profits from their investment. One dealer that deals with an international bank based in London says, “All of the commodity currencies are taking a hammering from the dollar’s rise”.

How Will the Gold Market Preform Against the Dollar

The gold market also helped to strengthen the US dollar. As gold went down 4 percent, the dollar went up because of added pressure placed on other currencies such as the Canadian and Australian dollars as well as the Norwegian crown.

While the euro and other world currencies directions are heading downwards, the US dollar is on an upward trend. With many woes facing certain countries like Greece and others, the value of international currencies are expected to continue falling. However, with a strong US economy to contend with, the greenback will always be outperforming other country currencies.

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Student Loan Debt Makes Home Purchase Almost Impossible For Millennials

The Burden of Student Debt Affects the Real Estate Market

Student loan debt has become a paralyzing financial burden for many young Americans. Today, millenials are now moving past their college years and entering the phase in their lives where they are looking to be homeowners. However, being the generation with the most student debt in America does not make the home buying process very easy. Millenials are least likely to own a home compared to generations before them. In 2014, only about 36% of household heads between the ages of 24 and 32 years old owned a home. That is down from 45% in 2005. One of the big factors to this low-rate of homeownership is the amount of student loan debt they have.

While homeownership may be lowering, the amount of student debt continues to rise. This can be attributed to the increasing costs of higher education. The average college student graduates with about $30,000 in both private and federal loans. The more education costs the more students take out loans to pay for their education. This has created a never-ending cycle of debt that affects other aspects of life such as buying a home. The amount of student loan debt now surpass that of credit card debt with the total student loan debt being $1.56 trillion and credit card debt being $1.03 trillion. Here are some ways that student loan debt can make it difficult for millenials:

  • Debt-to-income ratio

    – The number one issue that comes up when trying to purchase the home is the debt-to-income ratio. That is the amount of money you owe to lenders versus the income your bring in. The average income of college graduates is about $59,000. However, the average monthly payment of a student loan is about $350. This becomes a large chunk of monthly expenses. Banks are often wary of those with large amount of debt, especially debt like student loans which are seen as “unsecured debt”. Meaning that this debt is likely to be paid throughout a lifetime. Often, banks would prefer candidates whose expenditures are not more than 36% of their income. However, that can be difficult if your income is only $50,000. This ratio also can be affected by the cost of housing in your specific area. Those that live in higher cost areas can find it even more difficult to secure a home loan.

  • Credit Score

    – Another aspect that strongly affects homeownership for millenials is their credit score. About 8% of student loan borrowers were denied a mortgage because of their credit score. Those between the ages of 19 and 34 years old on average have a credit score of about 625. This is much lower compared to previous generations such as Generation X who had an average of 650 and Baby Boomers whose average was 709. However, as mentioned previously millennials also have a larger amount of debt compared to these generations. Millennials’ debt-to-income ratio is directly affecting their credit scores. Often, borrowers acquire a large amount of student loan debt and upon graduation found it difficult to find stable income to payoff the debt and defaulted into their loans. This caused their credit score to lower and made it difficult to be approved for a mortgage.

  • Down Payments

    – Getting approved for a mortgage can be a difficult first step to homeownership. However, the burdening reach of student loan debt does not stop there. Saving up for a down payment for a home can be difficult when you have such huge loan debt to pay every month. Often some would-be homeowners choose to take out a short-term loan to get immediate cash to use as a down payment . This might be particularly appealing for those living in states with lower student loan debt and lower costs of living. Millennials can access an online car title loan to get immediate cash that they can use as a down payment for their home. Since it is a short term loan, unlike a student loan, it can be paid off quicker and easier.

    Higher Cost of Living – Another aspect of student loan debt that is affecting millennials’ homeownership is the higher cost of living. While millennials seem to be earning much more than previous generations, the increase of income has not combatted the rapidly increasing costs of living. Millennials not only pay more for education and housing than previous generations but they must spend more on other expenditures as well. The cost of childcare is about 2% more than previous years, which might not seem like a lot but when broken down that is about $150 on average for child care compared to about $85 a week in 1985. Millennials also spend more on health insurance, transportation, and entertainment than previous generations.

Homeownership and student loan debt can be a tumultuous relationship. Student loan debt often paralyzes millennials from acquiring an integral part of the American Dream, owning a home. Millennials do have a challenging future when it comes to purchasing a home. However, with careful budgeting and dedication to paying off debt, the dream of homeownership can be a reality.

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5 Top Financial Technology Trends

Lately, there has been a lot of buzz in the financial services space over the quick and radical changes in the sector brought about by its shift to a new, digital model that will fundamentally transform everything.

In this piece, we take a look at the trends shaping the financial services industry to bring you up to speed on events.

  1. Digital Transformation

Our world is becoming very tech-inclined with a growing reliance on technology and online resources. This, coupled with increased competition from fintech and regtech firms whose business model revolves around a variety of new technologies has forced traditional financial institutions to invest in digital technologies to remake processes and become more efficient.

  1. Artificial Intelligence (AI) and Blockchain

AI and Blockchain continue to expand the frontiers of technology, enabling companies to solve even harder problems and disrupt the financial services landscape with huge competitive advantages. AI, for one, is taking the financial services industry by storm.

Several financial services firms now rely on artificial intelligence to cut cost, save time, and add value. For instance, wealth management institutions now use robo-advisors to analyze and understand client investment, spending, and general behavior regarding money management so they can customize the advice offered to customers.

Similarly, the blockchain, the technology which runs cryptocurrencies, continues to power innovation in the financial services sector. It offers an opportunity to speed up and simplify cross-border payments, ensure greater trade accuracy, improve online identify management, and ensure transparency in financial operations.

Through smart contracts, transactions and agreements are executed automatically once the conditions coded in them are satisfied. This help eliminates the need for an intermediary and leads to a reduction in cost.

  1. Digital-Only Banks Influence in the Financial World Continues to Grow

Digital-only banks and fintech companies are threatening to replace traditional banks as the focal point of the banking experience. As technological advancements continue to expand and consumers become more comfortable using the internet, their expectations for instant and straightforward digital interactions will continue to increase.

By their very nature, digital-only banks possess the tools necessary to offer consumers what they expect and prefer. Not operating from any physical location means they attract low transaction cost, which allows them to distribute resources better to provide customer experiences that are uniquely differentiated.

For instance, DBS Bank, a Marina Bay-based digital-only bank offers up to 7% interest rates on savings accounts, unlimited access to ATMs, zero balance requirements, etc., all of which can be difficult for legacy organizations to provide.

  1. Big Data Continues to Drive Modern Business Operations

Organizations continue to find new ways to leverage big data. This data now enables companies to create real competitive advantages by providing large amounts of information to assist with their research, marketing, etc. It is predicted that the Internet of Things will make big data even bigger by providing plenty of storage space as well as by offering the big data itself.

  1. Banks and Financial Institutions Embrace Cloud-Based Offering

Cloud innovation has been a thing in the financial services industry for a while now. However, it wasn’t until recently that banks started to embrace it. The innovation was generally not well received by traditional banks due to security issues. Brick and Mortar institutions feared that entrusting data to cloud will make it more susceptible to hacks.

Today, however, the technology is becoming more widely accepted, as banks now use cloud computing for non-critical functions like email, human resource, customer relationship management (CRM), customer analytics, as well as for development and testing.

Businessman hand working with a cloud computing diagram on the new computer interface as concept

 

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An Untraceable Currency? Bitcoin Privacy Concerns

Bitcoin is frequently portrayed being an untraceable technique of payment that facilitates illegal activities by allowing crooks to create and receive payments without being tracked. This depiction implies that users transacting in bitcoin can completely do so anonymously that their identities will never be exposed. However, that isn’t fundamentally the way it is. Although bitcoin provides better privacy when compared with traditional-payment connecting a 3rd-party intermediary for example a credit-card provider, it’s nevertheless not as anonymous as a cash transaction. A person’s identity could potentially be exposed in bitcoin transactions in fact, there are many ways.

A general idea of the Blockchain

Bitcoin isn’t anonymous. As we explain below, it really is pseudonymous an important distinction. It can also be a decentralized, peer-to-peer currency that is digital having no third-party intermediary for instance, a charge card issuer, vendor processor or bank that is involved to verify a transaction between a customer and vendor. Since there is no party that is third there must be another way to confirm a transaction between two users and avoid the double-spending problem i.e., a means of guarantee that an individual does maybe spend bitcoin they have formerly transferred.

This is where the Blockchain, the undoubtedly revolutionary aspect of cryptocurrencies such as for instance bitcoin, is necessary. A Blockchain is just a public, distributed ledger, by which every transaction is documented. A Blockchain ledger is distributed across a group of computers thousands of them, each with its own copy of the Blockchain transactions unlike traditional payment systems in which the ledger is maintained by a single third party.

Each block of deals in a Blockchain is complete by users within the peer-to-peer network, known as miners, who compete to resolve a complex problem that is computational. 1st successful miner to validate the deal broadcasts it to the network that then checks the results. Once checked, the new deals are added as a new block to the Blockchain. The miner who first successfully verified this transaction gets rewarded by the network with newly created bitcoins in the case of bitcoin. At the time of 2016, the reward was reduced from 25 to 12.5 bitcoins, and it is expected that the reward will be further reduced to 6.25 bitcoins in 2021 July.

Tracing Bitcoins Back to Individuals

Encryption might make the impression that these transactions are visible however unmatchable to specific individuals. However, bitcoin isn’t as untraceable as encryption may indicate. Tying an encrypted transaction to a real person may be it’s not really a risk that is remote. There are numerous ways this could occur. Users who count on a bitcoin trading exchange such as Bitfinex and Binance or Kraken to switch money for bitcoin have to divulge their information that is personal to exchange to produce a free account. The information collected by the trade varies, however normally includes, at a minimum, a user’s first and name that is last and, possibly, a phone number. The trade may additionally collect a user’s ip. If these exchanges had been subject to a data protection breach, a user’s personal information could be exposed. In addition, some exchanges that are centralized to manage users’ bitcoin funds and users’ private keys on their behalf.

You can find additionally wallet that is on line providers that control users’ wallets on their behalf. A wallet is really a software program that stores an accumulation of a public that is user’s personal key pairs. The storage space of personal tips makes these central exchanges, and online wallet providers, prime targets for crooks because, as discussed above, you aren’t access to a user’s personal key should be able to develop a bitcoin transaction that is valid. A hacker who accesses a user’s private key can send all of that user’s bitcoins to him or herself, or even to any intermediary of their choosing.

Summary

Although bitcoin is a decentralized and unregulated payment method, users should recognize that this does not mean that their bitcoin transactions are private and hidden from scrutiny. The public nature for the Blockchain coupled with the increasing threat of government regulation can result in the identification of users involved in transacting the currency.

 

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8 Things Small Business Owners Need to Know About Finance

Figuring out how to manage finances is one of the most challenging things you’ll face as a small business owner. Often, people get into the business world because they have an exciting idea or product to share. The chances are that you won’t have a lot of experience with accounts, taxes and cash flow too.

While learning as much as you can about money matters can seem like an exhausting process at first, it’s something you can’t afford to overlook when you start bringing your company to life. Knowing these 8 simple things about finance will help to keep your organization on track.

1. Sometimes You’re Going to Need a Loan

When you first launch a business, sometimes it’s tempting to try and do everything by yourself. The last thing you want is to be in debt before you’ve ever started making a profit. However, the truth is that most people simply don’t have the capital required to handle the demands of a business without a little support. A loan can be the most useful tool you have when it comes to starting your business, and even overcoming cash flow problems. Just make sure that you compare your options so you can ensure you’re getting the best interest rates.

2. Have a Billing Strategy

No matter how good you are at staying on top of things like cashflow, there’s nothing to say that your clients will be just as efficient. Most companies will have at least one customer that always seems to be late when paying their bills. Too much cash tied up in your unpaid invoices can quickly lead to cash flow problems. With that in mind, it’s important to make sure that you have a billing strategy in place. The good news is that there are tools online you can use to automatically invoice clients and send them reminders when they’re late.

3. You Need to Pay Yourself

When you’re running a small business for the first time, you might find yourself trying to put everything you earn back into the company. Any extra capital is a great way to help your business grow, but you also need to look after yourself and your family too. Remember that you’re playing an important role in your company, and you deserve to get paid for your work. Don’t focus on everyone else and forget to look after yourself.

4. You Need to Spend Money to Make It

This phrase might sound like a cliché at first, but it’s true. If you want to make real progress in any industry, then you need to be willing to invest in yourself and your business. With that in mind, make sure that you take risks from time to time, and invest in your growth. This could mean that you need to take an extra loan out at some point so you can afford to buy additional equipment, materials, or pay for staff, but a good risk analysis will help you to see if it’s worth it in the long-term.

5. You Must Remember to Look at ROI

Speaking of investing in the long-term, it’s a good idea to have a way to track your return on investments. Every time you start pouring money into projects for your business, make sure that you set up a measurement system that will show you which of your strategies are good for your future, and which might not be worth the effort.

6. You Need to Constantly Monitor Your Books

Monitoring your books might be an obvious task for financial health in your business, but it’s something that people often forget that they need to do regularly. If you’re the kind of person who might leave managing cash flow to the end of the month, try setting up an hour in your schedule each day where you can look at your incoming and outgoing expenses and make some crucial notes. The last thing you want to do is neglect your accounts.

7. It Helps to Establish Good Habits

Make sure that you do everything you can to develop good financial habits – even if it just means that you block aside some time at the end of each week to check that everything is running smoothly in your business. Running a small business often leaves you strapped for time, but your financials aren’t something you can afford to cut corners on. Start building good habits for your finances now.

8. You May Need Help

Finally, don’t expect to become a professional accountant overnight just because you’ve decided that you want to run your own business. If you don’t know anything about taxes and deductions, and you don’t have time to learn, then invest in an accountant or bookkeeper to help you. You’ll thank yourself for it in the long-term.

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How to improve your personal finances using a checklist

Personal Finance Checklist

Revamping your entire financial plan may seem like a gigantic task, so it’s easy to become overwhelmed. But by breaking your fiscal dreams into smaller, more manageable goals you’ll be setting yourself up for success while gaining some confidence about your money-making decisions with each item you cross off. Making a checklist can by the key to getting your money – and long-term goals – in order. Here are a few examples of simple changes that can make a major impact.

Start small.

One of the biggest mistakes people make when they’re trying to make a substantial change in their life is focusing on objectives that aren’t easily attainable. This is an easy way to sabotage yourself, because the task seems so large you can’t possibly reach it. Think about restructuring your budget in the same way you would expect to start a diet or exercise plan. You wouldn’t expect to be able to run marathons within the first couple of weeks, so why would you hold your finances to a similar standard? Like with most goals, the little things add up. Instead of backlogging every purchase you’ve made in the last six months, start today by tracking all of your extra expenses such as movie nights, eating out, and entertainment-related costs like cable TV or your Netflix subscription. No detail is too small when it comes to money management and financial stability.

Streamline your payments.

Consolidating or organizing all of your bill payments is another simple task to add to your checklist. Determine the bills that you pay regularly, their frequency, amount, and whether or not they can be paid online. If possible, set up all bill payments to withdraw from your bank account automatically and keep track of your email or online confirmations. This can usually be done either through the servicer or your bank. By automating the process, you’ll reduce the amount of time you spend each month gathering paperwork and information. You’ll also simplify your own record keeping, since you should be able to locate most of your payments with just the click of your mouse. Even better, you won’t have to worry about accruing late fees since you know exactly when your account will be debited for each bill cycle.

Pay yourself first.

Having a comfortable savings account is one of the most important steps towards financial security. As part of your monthly, bi-weekly, or even quarterly checklist, send a portion of your paycheck to your savings account each time you get paid. Depending on your personal goals, income, and expenses this amount may vary. However, don’t underestimate how quickly even $10 or $20 per paycheck can add up over time. If possible, set up an automatic deposit so you’ll get used to receiving a lower amount. This is one line item that will give you a bit of satisfaction every time you check it off your list.

Keep your budget balanced.

Keeping your overall budget in order is usually one of the most daunting tasks, but breaking it up into smaller sections will make it a breeze to get through. Make a list of all income sources, everything you spend money on regularly, and for at least one month track all of your expenses to get an idea of how much you should allot for miscellaneous spending. Once you have your list, break the expenses into categories such as utilities, travel, housing, food, insurance, loan payments, and childcare. Your static expenses are those that are consistent for every pay period, and your flexible expenses are the less predictable ones such as car repairs or additional medical costs. Based on what you typically spend per month, you should be able to outline how much is needed to put towards extra expenses on top of your static ones. Being able to check off when each of these obligations are met will give you some peace of mind, and you won’t have to second guess whether you paid that bill or not.

Money Management for Retirement.

Money management is a huge part of most of our lives, and many of us have areas that we’d like to improve. Whether you’re saving for a dream vacation, college, or retirement, keeping track of your goals and when they are met is a valuable tool that you can use for all of your financial plans – no matter how big or small.

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Copy Trading: Why It’s a Great Idea for Beginners

 

Copy Trading And What It Is All About

The financial markets are becoming more accessible with online trading platforms and top brokers offering their services, so it is not surprising to see new investors taking advantage of this opportunity to explore the available instruments. There are more forex and stock traders today than ever before, and this is a good sign of a growing investment landscape.

Entering the now open financial markets, however, is not as easy as it seems. You still have to know your way around the traded instruments and the market as a whole. More importantly, you need to enter the market with a clear plan in mind. There are a lot of things to understand about the financial markets before you can make successful trades.

Many new traders turn to copy trading – and the broader social trading networks in general – for help. You too can learn about the financial markets while copying the trades of other, more experienced investors. But is copy trading a good idea?

Learn from the Best

Copy trading allows you to copy the trades of top investors on the market, but it doesn’t stop there. You still maintain complete control over the trades you make, including when it comes to deciding which investors you want to copy and how each trade is adjusted to your portfolio.

This level of control makes copy trading perfect for helping you learn about the financial markets you are entering. Rather than reading articles and relying on other resources, you can learn directly from top investors while benefiting from their trades at the same time.

Copy trading also lets you be a part of the market in real-time. You can apply the same technical indicators as the ones used by top investors, follow fundamentals from the same sources, and learn about the trades being made based on analysis and the usual decision-making process.

Allows You to Invest with Limited Knowledge

One of the biggest advantages of copy trading for beginners is that it allows new traders to start investing even if they have limited knowledge of trading and how the markets work. If you’re new to trading, it may be difficult to understand the challenges and pitfalls you should avoid and understand market behaviour.

People who first start trading currency pairs might be overly cautious at first, in order to not make mistakes. This makes the whole learning process much lengthier and will slow down your progression. But with copy trading, you’ll basically have a seasoned trader walking you through trades and showing you exactly which moves you should make. This will allow you to start making profits much faster than you would otherwise.

Saves Time

People are often unaware of how much time it takes to devise a trading strategy, and how time-consuming market analysis can be. Fundamental and technical analysis will most likely dominate your time if you’re doing everything on your own, especially if you’re not familiar with in-depth analysis in the first place. But with copy trading, all the hard work will already be done for you, and you can significantly reduce, or even completely bypass analysis altogether.

More Options to Choose From

Today’s copy trading services also allow you to tap into the same vast array of instruments that you can trade on the open market. Regardless of the CFDs and foreign currency pairs you are interested in, you can always find investors whose trades you want to follow.

This also gives you more flexibility in terms of shaping your portfolio. While you learn about the markets, your portfolio will continue to grow, and you stand a chance of banking profits along the way. There is no better way to learn than while profiting from real trades!

On top of that, you also have different platforms to use. ZuluTrade, for example, focuses more on their copy-trading features and signals. EToro, on the other hand, offers features related to both copy trading and the broader scope of social trading. The options are indeed endless.

Easier to Get Started

Copy trading doesn’t just make entering the financial markets easier. Getting started with your own copy trading account is also very easy to do, especially now that you have sites such as InvestinGoal helping you every step of the way. Via InvestinGoal, you can find reviews of popular copy trading services and platforms. These reviews help you choose the platform that suits your specific needs best. There are tips and tricks for beginners and even more resources to use as you learn about the market.

You even have news and social trading blogs to utilize as you venture further into the financial markets. With so many resources available, becoming a successful online trader – and starting that journey using copy trading as your weapon of choice – is easy.

Better Diversification

The added control you now have when copy trading helps you eliminate some of the issues associated with copy trading in the first place. Rather than taking the passenger seat and hoping for the best, you now have the ability to go deep into the trading strategy and find tactics that work for you.

In terms of diversifying your investment portfolio, for example, you are no longer limited to following one investor at a time. This means you can enter multiple markets, learn about them simultaneously, and copy the trades of top investors in each market.

The same can be said for risk management. In the old days, copy trading was often associated with a lack of risk management. This is due to many new investors taking copy trading as a way to make money quickly, which it isn’t. The more you are involved in managing your portfolio’s risks, the more profitable you will be in the long run.

Is it a Good Idea?

Is Copy Trading a good idea. We would have to say yes, read our opinion
Copy trading is a fantastic way to enter the market when you have little to no experience. That said, it is something that needs to be approached with learning in mind. Copy trading is how you learn from the best investors and be a great investor yourself, all while making money in the process.

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How PPI Claims And Compensation Have Affected The UK Economy

 

Payment Protection Insurance

PPI, perhaps the most high profile scandal in British financial history, has naturally earned its notoriety over the past few years since the reveal in 2011 that millions of British consumers had been mis-sold the insurance. With billions of pounds worth of compensation being paid out since, it has had a catastrophic impact on the UK. In this article we’re going to evaluate that very influence as we take a look at how ppi claims and compensation have affected the UK economy.

PPI: The History

Before we assess the impact that PPI had on the UK, let us first give you a succinct insight into its history.

PPI otherwise known as Payment Protection Insurance was sold alongside credit cards, loans and other financial agreements as a failsafe should a borrower’s income ever fall, due to them either being dismissed from their job or becoming so seriously ill that they were no longer capable of repaying their loan.

The insurance became increasingly prominent throughout the 90s and into the new millennium as lenders discovered they could add lucrative commissions onto PPI policies. As more and more financial intuitions began to exploit the protective policy for financial gain, a series of civil cases began to be contested in court whereby consumers claimed that PPI’s were essentially ineffective.

This culminated in 2011, when the Financial Conduct Authority officially released a public order stating that millions of PPI policies had been mis-sold to consumers and that they were owed compensation as a result.

It is believed that between the years 1990 and 2010 that over 45 million consumers were mis-sold PPI.

What It Meant For Lenders

As you can imagine such a demand for compensation would have a disastrous impact on any industry and that’s without considering the fines and legal fees each of the UK’s banks and lenders would have incurred as a result of mis-selling PPI.

The most recent total supplied by the Financial Conduct Authority, reported that since January 2011 that £32.9 billion worth of compensation had been paid out to consumers. To put that figure in perspective, that is over triple the £8.77 billion it cost the public to pay for the 2012 London Olympics.

However PPI is still prominent today, having an significant effect on the lending industry with Britain’s most high profile banks, Lloyds, Barclays, RBS, HSBC and Santander collectively setting aside a further £35 billion to cover the overall rising cost of compensation.

A Brief Boost

There is some evidence to suggest that PPI claims and compensation’s effect on the UK wasn’t wholly negative, in fact in the immediate aftermath it actually boosted the UK economy briefly.

In 2012, the country’s overall disposable income was at a low, amongst a rise in unemployment and the recession still looming over UK’s most prolific industries, many households were struggling to buy anything other than necessities.

However as bank’s began to compensate its consumers, household’s suddenly had an additional £2000 to spend on whatever they wanted. This impact was so significant that it actually led to the Independent Office for Budget Responsibility to up its estimate of real disposable household income by 0.5%.

A New Industry

Also the effect of PPI compensation has led to the creation of new jobs, specifically in the form of claim management companies.

Helping consumers to find out whether they are eligible for compensation or not, they hire customer service staff, complaint handlers, call centre executives and many more managerial positions.

Without the PPI scandal’s effect these businesses wouldn’t have been created and thousands of employees wouldn’t have been recruited. However as we approach the 29th August 2019, the PPI deadline, there is much uncertainty surrounding the security of these businesses and their worker’s positons.

There you have it, the exact effect PPI claims and compensation had on the UK economy. Damaging the lending industry, briefly boosting the economy and creating an entirely new industry, whether or not you consider its effect to be positive or negative you cannot debate that it has been vast.

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