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Collateral Management With the Help of Financial Services Software

Collateral management allows lenders to employ less risk than they would have previously, by any number of unsecured financial transactions. Collateral has been an effective means for collecting unpaid debts for hundreds of years, so how does it work today? In today’s industry, it typically is considered bilateral insurance. Although in the last twenty years, collateral has taken many other forms: collateral outsourcing, collateral tax treatment, cross border collateralization, arbitrage, and several others.

Every transaction contains an element of risk, especially on transactions whereby cash is not the method of exchange. Some additional risk-free transactions are in the shape of stock and bond purchases, whereas transactions with a lot of risk include derivative deals, credit default swaps, business loans such as money market transactions and term loans. In the aforementioned transactions, financial institutions will typically demand some type of collateral in the following ways: cash, government bonds, notes, stocks, real estate, art, etc. The requirement for collateral is nearly required in transactions between counterparties including hedge-funds, lenders, brokers, and banks. Typically, collateral can be used in smaller loan situations, but they are of course vital for the larger transactions.

A lot of people are turning towards financial services software for the best advice with regard to collateral, even larger entities including banks are benefiting from software’s effortless functionality. A reputable collateral software program shares insights, methodologies, and strategies for making the right decisions. With predetermined, analytical data, the user is informed of the best decisions for his or her business. This is certainly an option for some.

Here are some useful terms to help understand some specifics regarding collateralization: a credit enhancement allows a borrower to receive the best rates possible. A credit risk mitigation opportunity is for private transactions that diminish risks, which the counterparty may default on entirely or partially. Moreover, a trade facilitation tool allows parties to diminish holds (limits, credit holds), so that parties can trade with one another instead of reaching an impasse. Lastly, an arbitrage opportunity uses tri-party transactions that require collateral.

There are far too many facets of collateralization to focus on entirely, so it may be wise to focus on OTC (over-the-counter) transactions because they are quite common. In these situations collateral is mandatory between two parties whether they are large or small. Despite the size of the financial institution, collateral is a must. For any business transaction risk management procedures must be in place, but often time’s accurate assessments border on the impossible. The best way to design a contract that benefits both parties is to steer away from jargon that confuses instead of clarifies. A contract that clarifies counterparty risks and settles bilaterally is the preferred method, instead of allowing clearing houses to negotiate the terms. For both parties to agree, supervisory guidance is the only option. Moreover, collateral authorities need to make sure that there are no illegal actions underlying the OTC agreement in place.

Consequences of Consumer Confusion in a Financial Services Industry

I shall focus on consequences of consumer confusion in this post. Another article published by me on ‘Customer Confusion in the Financial Services Industry’ focused on three important antecedents to consumer confusion namely; expectations, attribute confusion and information confusion in the context of financial services industry (i.e. banks, insurance. credit card, mortgage and other such investment firms).

In this post I will focus on three consequences of consumer confusion: (1) attribute satisfaction; (b) information satisfaction and (c) overall satisfaction.

Using quantitative method and recognised scales in the fields of psychological science and consumer behavior, we examined the antecedents and consequences of customer confusion. The findings indicate that expectations, attribute confusion and information confusion importantly impact overall confusion.

Furthermore, we also discovered that attribute confusion importantly affects product and information satisfaction however expectations don’t. It was found that information confusion importantly impacted information satisfaction but did not impact attribute satisfaction. We also discovered the considerable impact of overall confusion; attribute satisfaction and information satisfaction on buying decision. Our outcomes suggest that customer confusion is a multi-dimensional construct with considerable impact on behavioral intents. There are very many noteworthy theoretical and managerial implications from the precedent findings.

Increasing understanding of clients and diminishing confusion is one of the primary aims of any firm. Moreover, in markets like financial services, where numerous similarities of expectations, attributes and information exist within consumer judgments, decrease in consumer confusion can become a reservoir of competitive advantage. The framework for this research furnishes marketers first hand thought of where and how consumer confusion is induced. This will assist marketing managers in optimizing their organisational resources to handle the multi-faceted phenomenon of consumer confusion. Managers dealing customer confusion as a uni dimensional phenomenon may experience unwanted effects. For example, just bettering the product or service characteristic may reduce product confusion. However, deficient communication and highly multiplied expectations may still lift the overall confusion. Similarly, a good communication effort with a less separated product or service may as well elevate confusion in clients minds.

The findings show that information confusion has an impact on information satisfaction and which in turn, has a strong impact on buying decision. In the setting of FSIs, this finding merits consideration in particular where customers are faced with wide ranging technical and complicated information on the fiscal products which can make implications for purchase decision.

The results also uncover the sizeable affect of information confusion on information satisfaction. However the impact is non-substantial in the case of attribute satisfaction. Therefore, we suggest the use of product and information satisfaction as disjoint constructs in future studies rather than employing overall satisfaction as a single construct. Furthermore, the study findings also represent the complexity of relationship between the constructs. Marketing Managers should see that they process these concepts as stand-alone rather than assuming a causal relationship.

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Consequences of consumer confusion in FSI

Customizing Pay-Per-Click Search Engine Marketing For the Financial Services Industry

No one would argue that an online presence has become an increasingly important component of any financial services marketing program. However, most financial services companies are still struggling to determine what online marketing approach will cost-effectively promote their site to those target market segments that are most likely to become loyal and profitable customers.

For a time, banner ads generated large numbers of click-throughs for advertisers in virtually every industry, causing the number of such ads to sky-rocket. Studies soon revealed, however, that these early reports may have been misleading. As the number of banner ads increased, click-through rates fell dramatically. Research into the reasons for this decline revealed a major disadvantage of banner ads. Many click-throughs appeared to occur because the user was attempting to delete the banner. The truth is that, while banners reach a wide audience, a great number of viewers see them as “spam” and delete a company’s expensive advertising without ever viewing their site. Increasingly, banners were seen as an intrusion to be eliminated as quickly as possible.

Search engines offer financial services organizations a more controllable online marketing alternate. Effective use of search engine marketing tools enable organizations to attract a “pre-qualified” audience by screening what the user is looking for against what a company actually offers. As a result, search listings are more efficient than banners in generating brand recall, favorable opinion ratings and purchase origination. At the same time, however, a search on virtually any topic can produce hundreds of pages of Web site listings, and research shows that most users don’t look past the first page of results. In fact, many users will consider only the top 3 or 4 listings. Therefore, it is essential that a site be close to the top of a potential customer’s search to effectively reach its target audience.

Search Engine Positioning (SEP) techniques can help dramatically improve a Web site’s search rankings. Search engine optimization is an SEP technique that has become extremely popular. To optimize a site, a company determines what search terms would apply to their business-e.g., “global investment management” or “managed separate accounts”-and then includes those terms repeatedly on their site. While optimization works, many site owners object to altering their sites just to achieve top rankings.

As an alternative, most major search engines offer “pay-per-click” programs that provide site owners an effective way to achieve successful ranking without changing their sites. These programs rank a Website not by the frequency of a key search phrase, but rather by how much the owner is willing to pay for a click-through generated by a search using that phrase. For example, if a company’s bid of 25¢ is the highest for the key phrase “global investment management,” their listing will be at the top of the “sponsored links” appearing on the first page anytime that search phrase is entered and they will pay the search engine 25¢ for every resulting click-through. However, competitors for preferred ranking against the same key phrase can post a higher bid at any time and, depending on the popularity of the key word, drive the price up to several dollars per click-through.

The key for any company wishing to make cost-effective use of pay-per-click search engine marketing is the selection of very specific, highly relevant keywords that apply to their services and the benefits offered to their targeted audience. More general keywords will generate click-throughs by users who do not have a real interest in their offerings and expertise.

As the importance of the Internet as a marketing and promotional tool continues to grow, it becomes increasingly critical for financial services marketers to familiarize themselves with all of the approaches that can help them effectively leverage its capabilities.