Saturday, January 31, 2009

Economic Crisis: Was a Soft Landing possible?

Was there a way to avoid this messy Financial crisis? Could we have avoided this in the first place or at least could have arranged for a soft landing? Lets analyze some perspectives.

Greed, fear, artificially concentrated growth and Lack of proper oversight are the four main root causes of this Economic Crisis. In last decade or so we were behind easy money. Short term results defined the success. The policymakers never thought big enough for sustainable growth which needs inclusive growth. Don't make a mistake here. Inclusive growth does not mean just communism or providing free money to poor people. But this means creating more jobs in unexplored areas and new technologies to solve the biggest problems facing mankind(like green technologies, future energy solutions etc.). To
save capitalism from the capitalists we need to create wealth and buying power at the bottom of the pyramid and the only way to do that is to redistribute wealth by creating huge amount of well-paid jobs. Instead what we saw is huge difference in salary structure between the working class and the management class(The differentials between the lowest and highest paid have risen to 1:300). Very few people made enormous amount of money by doing some Investment Baking and Management jobs. Most of these people were creating some artificially inflated wealth by derivatives and different other esoteric financial instruments. They were also fantastic in packaging and selling these produts to common people who had no idea about what they were buying. For short term profit they sold home-mortgages to people who did not have capability to repay those loans. They thought that is not a problem as the price of homes will continue to increase indefinitely and in case of foreclosure they can still sellout the house and make profits. American consumer consumed like anything by taking loans from all over the developing world the world. The developing countries found opportunities in selling their products and services to the American consumer and all those earnings were again reinvested in US as Treasury bonds. Unfortunately this loop of lending and consuming can not sustain and nobody thought about systemic risks of all these transactions. People were greedy and lacked common-sense. Stock market prices of emerging markets gained like anything and people stopped valuating stocks by Financial ratios. At the same time common people were not getting the benefit. They did not have health insurance or retirement savings or consumption capacity. Still they were lured by tempting advertisements to lead a quality lifestyle by borrowing on Credit cards and buying homes on loans which they can not repay.Government and other oversight agencies never did their jobs by properly controlling this greed. Opportunistic market makers created cheat funds and ponzi schemes. Hedge funds charged crazy amount of service fees and made huge amount of over-the-counter(OTC) risky transactions. And the most interesting thing is that all these unsustainable business continued for more than a decade. And then came the shock! Home prices went down, Foreclosure rate increased,Stock market plummeted, Default rate increased on Credit card loans, million of jobs were erased, banks failed, thousands of business went bankrupt, government bailout continued without any positive results, credit market collapsed, government debt increased and everyone is today fearful and puzzled how all these happenned so soon.

Was there a way to avoid this crisis? The answer is Yes and No. Theoritically 'Yes'. We could have done right things at the right time. We could have had more effective oversight and compliance, we could have planned for right kind of human resource allocation(best minds of the nation could have done research on green technologies and work on solving future energy problems instead of creating esoteric financial contracts), we could have planned for sustainable job creation and wealth distribution for creating a bigger market. Connecting dots backwards is easy but life needs to lived only in the forward direction. Hence I believe considering the condition present at those times it was not possible to stop this crisis. When things are going good it is very tough to take hard decisions like increasing government control and executive pay, investing in not-so-attractive green technologies, controlling credit limits and thus creating better spending habbits of the people. Hence in practical sense this crisis was due.

Let's see if there are anything good we can make out of this crisis. What are those important decisions which can help us out of this crisis soon. Following is my recommendation:

Greed and Fear are the root cause of this crisis. First it was greed: which inflated prices by creating artificial demands and then it was fear: which deflated prices to the artificial rock bottom. I call it artificial because if you think critically you will appreciate that our capacity of supply and demand should not change so drastically. We had almost same number of people living in 2007 and 2008(actually more) and the total natural resources avaiable in the world was actually less. Then why our home prices were dropped so dramatically. Why limited natural resources like gas prices can drop so significantly? Why we needed so less products or services in 2008 because of which we had to cut so many jobs? The answer is that the market sentiment changed from greed to fear. Previously people were getting much more than needed and they consumed much more than needed. After the shock it just reversed. People started a selling wave in Share market, stopped any discretionary spending and the sentiment continued to drop. One way we could have(or in that we still can) ensured a soft landing was through adjustable pricing of everything we transact. When demand drops down share, commodity and home prices fall but few things do not change in so linear fashion. For example salary or value of a mortgage loan(in general sense value of currency). Instead what we see is job cuts, or mortgage foreclosures etc. This process creates shocks in the market and creates more problem in Federal budget. People loss jobs and they bcome unproductive. At the same time they continue to cost in unemployment benefits increasing federal defecits. During the housing boom period people had baught houses in very high valuations and now those property prices have dropped creating loss for sellers and banks having foreclosure inventories. This is a vicious cycle which continue to decrease the price of the properties and the foreclosure rate. How can we solve these problems. Reprice the instruments and share the loss through mark-to-market accounting so that this process stabilise soon and we can again get back to the right track. I would suggest ban any future job cuts and foreclosures. Instead start a price discoery process to reprice the salaries and property values. Typically I am suggesting to follow simple demand-supply pricing. If the job demand is less you need to accept the paycut(it is still better than unemployment right?). If the value of a house decreases it is still better to renegotiate the loan terms and stop foreclosures. In both these cases all parties(including government) need to accept some loss but that should stop the downward spiral fast.

Economy depends a lot on the market sentiment, risk-taking mentality and consumer spending. Hence one good way to help the economy to recover is to instill consumer and investor confidence. Today both leaders and media are saying all negative things about the economy. This is actually lowering consumer and investor confidence. Instead of this if the leaders and the media(President Obama and other leaders, CNN, CNBC, FT, WSJ, NY Times)start saying some convincing but optimistic views the Economy can recover faster. If all the people again start buying stocks, houses and products the economy will be back on track very soon.

Become a Brand

Christin Dior, Prada, Gucci, Rolex, Apple, BMW, Orient Express: All of these are extraordinary brands, famous for their premium products and services. Many of us do not have financial capacity to avail these brands, but we all dream of using these products and services one day. What makes them special? What helps them to charge 100% or more premium pricing for their products and services? It is their goodwill of supreme quality. They are never value players. They are never cheap yet very useful(WalMart or COSTCO). They are enormously costly but enviously wanted. They are made for class differentiation. They are made for page-3 discussion. Only the super-rich can afford show-off their wealth with these products. And that makes them special.

There are many people who work like dogs to become that kind of wealthy. Many of the times they even don't love what they do. They just slaze in office just to live better in the future. Unfortunately some of them they never think that they have earned enough money and they can now lead a good life. At that time they become greedy money making machine. Worst, they even take loans to buy these costly designer products and to repay these huge loans they need to continue to do the same monotonus hardwork which they don't enjoy.

I have a better solution for these people. You must be extremely good in some area. You need to recognize that special profession which makes you tick. How you can do that? Easy, just experiment and listen to your heart. You will surely find a profession that you love and once found just stick to your core genious. You can be rich and famous only by doing things which you love. Because to be successful you need to work hard; work hard long time; and that effort can only be sustainable if you love the job. Once you do the job you love, you will become successful and create a brand of your own. For example you love cooking. Just stick to your love and you can become a famous chef one day. That can make you the brand ambassador of one of your loved product which you wanted to own for so long.

So dream big, work hard and smart by choosing the job which you do best and never think short term. I cannot over-emphasize the importance of the last item. Never do things which you don't love but gives you easy money or buy things beyond your capacity and waste the rest of your life in paying the debt.

Become a brand for yourself by your own inner qualities and don't try to become a brand by buying other famous brands.

Tuesday, January 27, 2009

Reduce salaries reduce taxes but don't cut jobs.

Job losses are becoming Frequency type data nowadays. Hundreds of thousands of jobs are evaporating in corporate America. Small businesses are closing down at an ever accelerating rate. It's like people care about a single death but when it is a massacre it just becomes a number. Job cut is a easy short term solution but a very tough long term problem. Unfortunately Corporate America or the Federal government is yet to appreciate the truth and it is going like a never ending downward spiral.

Let me show how this is bad and how we can manage economic downturn in a better way. 

A single job loss creates multiple problems for the government and the business economy:

Loss of Tax revenue - Income Tax, Sales Tax(spending decreases as people get pink slips)
  1. Social cost - Unemployment benefits from government.
  2. Wastage of Company Learning and Developement Expenses, Low employee morale and productivity.
  3. Less Spending - Means less business: which means more job cuts. Emperical study should show one job loss means X more job losses in future.
  4. Other Financial and social issues - More credit defaults, more criminal activity, more social tensions etc.
Hence it is evident that job losses have a downward spiral effect in the country's economy. Agreed. Then what we can do for sustaining a global economic crisis like this? Here are some of my thoughts:
  1. Government should ban(or at least control) Job cuts by companies and also should reduce any lower cap on salary. The idea is not to cut any jobs but reduce the costs by reduced salaries. This way government can still get taxes(Income and sales Taxes) and need not pay unemployment benefits.
  2. Once people have jobs(although having less salaries) they will continue to spend(although at lesser rate but still more than if they didn't had any income). This will reduce the downward pressure on the sales numbers and make the economy more sustainable.
  3. To stimulate the economy government should reduce tax rates at least on a temporary basis. This way both companies and customers will have more money at hand to spend. This loss of tax revenues can be compensated once the economy becomes strong by charging more taxes.

ESOP Plan for Mutual Fund Compensation

Asset Managers are paid huge compensation in cash and most of the times it is proportional to the asset under management. To increase their earning Mutual Fund managers do all wrong things for the investors: They invest in risky securities and momentum stocks, do short term trading with more than 100% Turnover ratio just to increase trading and short term taxes. Why do they do that? Because most of the times they don't have big stakes in their own investment decisions. They just try to make money out of investors pocket.They are like consultants: if it is a success it is the power of the idea of the consultant; if it is failure it is the failure of the client's implementation. In either of the cases their compensation is not at stake. 

How we can change it and make the asset managers more responsible for the investors? The greatest investor of the world, Mr. Buffet has the answer. His company BERKSHIRE HATHAWAY INC. never charges any fees to its investors for the Investment Service it provides. This is because the promoter himself has a major stake in that company and as the people buy Hathaway stocks the stock value increases and thus rewarding the promoter. We can have a similar reward system in Mutual Fund compensation. Instead of 100% cash compensation the major part of Mutual Fund compensation should be through Mutual Fund stock options at a fixed future price(which is generally higher than present value)redeemable at future date only. This should encourage the Fund managers to take care of the Long term health and sanity of the fund and to make prudent investment decisions.

TARP ETF: Wow What an idea

CNBC reported the introduction of TARP ETF in NASDAQ. Typically this ETF will track companies funded by TARP bailout money. That means this index is an indicator of the effectiveness of the 700 billion government bailout program. If this index goes up it shows that Taxpayers money are being utilised in a better way,otherwise not.

Stock price is the indicator of the company management performance in the long term. The board and Executives are judged on the company stock performance. One major part of the executive compensation is linked to stock options. At a higher level market indexes are the barometers of the economic health of the country. In the similar fashion we should create different indexes to judge government performance. And government executives should be judged(and compensated) based on these indexes. At the same time investors can be benefited if the government perform well as the value of the index will grow in that case.

This has another dimension. Leave aside developing countries like India, even in the most matured countries like in the US government are not judged on a regular basis in some objective, measurable ways. Theoretically we have Freedom of Information but practically we don't have it. If introduced these set of indexes should help the people to track the performance of the elected government. This should also help in more prudent government allocation of Tax payer's money and increase the efficiency of the government executives. 

We should have a Government Performance Index having different index components. Some of the components can be as follows:

1. Budget deficit reduction
2. Foreign debt control
3. Federal Expense/Investment ratio reduction.
4. Gini Index
5. National Security performance(military expenses vs. lives saved)
6. Happiness coefficient of the citizens
7. Health and Education performance 
8. Level of corruption etc.

There can be some challenges in creating this kind of index due to the secretive nature of some government agencies. Many of the times we may not be able to accurately measure the performance of the military. Because of the confidential nature these departments do not disclose many of the investment or expense data. Another problem with generally military investments is that they do not have any tangible outputs or deliverable and hence it is difficult to calculate the efficiency of the system(this is also the root cause of many corruption). The index creators need to show innovation to solve these problems. They should not compromise on national security as well as should not ignore tracking of huge military expenses.

Wednesday, January 14, 2009

Better Accounting:Need of the hour

History shows Sarbanes-Oxley Act was not successful in controlling Financial scams. It costed too much money without being able to control Accounting malpractices like Satyam scam(NYSE:SAY) and Madoff scandal. I believe there are still large number of such scams yet to be disclosed.

I think following are the reason for its failure:

  • The Act was too much inefficient in its implementation. It depended on too much documentation. When you have too much documents to create for a small and simple process change you become frustrated and the quality of data takes its toll. You just reuse a previously created document and change the name,date etc. and save it as a new version. You may ignore the fact that the facts and figures may have changed with time and those changes need to be documented properly. With the progression of hierarchy the number of documents to review increases enormously and it becomes quite impossible to review the documents for its truthfullness. It is even more difficult for the external parties(like analysts, auditors etc.)to review the correctness as they have even less time to review and less information about the company operations.This weakness has been exploited by dishonest company executives many of te times. This caused multiple cases of accounting scandals and completely wrong credit rating information.
  • US government(and consecutively other governments) allowed huge amount of Capital transaction Over-the-Counter(OTC) and through unregulated Hedge funds and Private Equity Flows. These industries have multiple weakness: Huge unaccounted money transfer, Highly inefficient Asset management Fees and Speculative Highly Levereged Transactions causing systemic risks. At the same time this creates an ethical problem of double standards: Mutual Fund companies are regulated but Hedge Fund Companies are unregulated; although both are typically in the same business.

To solve the problem the governments(it should be a coordinated effort of all the governments throughout the world) should work on two things:

  • We need to invent a better way of accounting to minimise the frauds. We need to minimise unwanted documentation but capture correct,reviewable and verifyable Data items standardized across the board. Also to minimize manual effort we can create Automated Business rule process for Data Validation etc.
  • Standardized and uniform regulation, more conservative reserve requirements, controlling (at least regulating) the Hedge Fund and OTC Market transactions.

Orkut: My Wishlist

Orkut is trying to reinvent itself everyday by creating new Apps, new colors etc. But I think it is still missing the big thing with immense opportunities. The implementation of this idea is challenging, as it may need to redesign the Orkut code architecture. Still this is worth the effort.

Today, orkut has limited options to create profiles. At the high level it has Social, Professional and Personal pages. I believe those pages have some limited fields to create the complete profile of a personality. Worst thing is even if you don't fill those fields they are displayed in the page with blank values. This looks pretty bad.

I suggest to create a site in which the users will have the ability to create customized pages of their own. For example I don't want a Personal page. In that case no Personal page will be displayed with blank values. Instead of Personal Page I want a Page called 'Creative'(just to showcase my creative world beside my Social and Professional world). In that page I want specific fields of my own(not the limited fields which we have today, but say my 'Passion'). This is just an example but for this idea even the sky is not the limit!

Thursday, January 8, 2009

Each AIIMS doctor costs 17 million Indian Rupee

Of the 2,129 students who passed out in the first 42 batches of the MBBS programme at AIIMS -- from its inception in 1956 to 1997 -- the study team tracked down 1,477 doctors. Of them, 780 or 52.81% were found to be working abroad.

India has a dismal patient-doctor ratio. For every 10,000 Indians, there is only one doctor. In contrast, Australia has 249 doctors for every 10,000 people, Canada has 209, UK has 166 and US has 548.Hence this brain-drain is a big problem for India even if we consider the NRI remittances as creators. At the same time I think we can not stop anyone from moving abroad (ethically and practically).

Better we can think of the following solution:

We should follow the US model of higher education. Increase the cost of higher education and make sure enough Need based Scholarship and no-guarantee loans are available for full tuition funding.
This should solve the educational funding issue and help government or private to create more opportunities for higher education. More doctors will help us to improve the per capita ratio.
The difference of medical profession from other high cost profession (like engineering or MBA) is that you need physical presence of the qualified professionals in the village or remote areas. That is challenging as very few people will love to live in such a place after earning a high cost degree (both in terms of money and effort) especially when living in Indian villages is anything but comfortable and at the same time the government salary is not attractive. One way we can do that is to create a mandatory one year post degree paid training (house staff program) in village areas. That way at least we can have some resources available.
Another possibility is to create military like 10 year bond for servicing in village areas (for those students cost of medical education will be much less). There are still few people who don’t come into this profession for money. These non-profit minded guys can be used in villages. Personally I don’t like this idea but can be useful in poor countries like India if it can be implemented(people can still study with subsidies and then break the bond; in the absence of proper legal structure in India implementation can be challenging).

Friday, January 2, 2009

Dumbest moments in Business

Fortune published a list of worst Business Decisions in 2008.
But I think dumbest of them is not listed in the main article.
Consumption beyond capacity by enormous amount of leveraging, greed, wrong housing market assumptions (nothing can go up indefinitely), wasting resources (4 SUV families). There are many dumb mistakes done by Americans (and so called Americanized world).
But the dumbest of all is not to work on Sustainable environment planning. We all know we can not meet our energy needs by the present technology. The best thing we can try is to create a massive research project (in the scale of Manhattan project) to invent new technologies to solve these problems. I hoped Obama will do that. But it seems Obama is more focused on creating jobs by unnecessary projects (building roads and highways, which I believe is not so urgent), bailing out(by taking new loans to make messier Federal Balance sheet)auto companies(which make crap vehicles) and stimulus packages(which may stimulate the wasteful over consumption habit of Americans and thus destroy a good habit(living frugally)recently developed within Americans).
This financial crisis can be a boon for us if we take lessons and change the way we do business. Investing in Sustainable science and engineering (geo-engineering), better accounting, better wealth distribution, minimizing wastages are few of the things we should focus now. Unfortunately we are not doing any of these and American well as world economy is becoming out of control day by day.

Few ideas for iPhone or App Store Developers

Real time Web cam:

Wouldn't it be great if I can share my New year eve experience in Times Square real-time with my family and friends?

iPhone shape is like a small mirror, why it can't be a mirror:

Just want to check if I look OK before I enter the interview room. iPhone can help!

Cut-Copy-Paste Utility

A must for saving time and improving productivity.

Zoom for iPhone camera

iPhone camera is the worst part of iPhone. Needs zooming facility and better resolution.

One Stop Shop for all Finance Management Needs: A TRIZ Analysis

Active Money management takes a lot of our time and most of the times the activities can be automated. We have different Money management tools available in the market (FREE or Subscription based service) but those are not Complete or Comprehensive. Also they don’t view the complete perspective of wealth management and lack intelligence which can be built in an Expert system.

This article aims to close those gaps by applying TRIZ principles and conceptualize an ideal system for all Finance Management needs. The proposed expert system should be a one stop shop for all money management needs.

Introduction to TRIZ

Theory of Inventive Problem Solving (TRIZ) was developed by Genrich Altshuller and his colleagues in the former U.S.S.R. starting in 1946, and is now practiced throughout the world.

Major cornerstones of TRIZ are as follows:

1. For finding the ideal solution of any problem we need to solve contradictions.
2. Innovative solutions do not compromise and can be found using TRIZ principles.
3. After analyzing huge amount of Patent data very few universal principles of invention was codified.
4. Any personalized problems can be solved by making it generic, finding the generic solution and then customizing the generic solution to the specific problem.
5. Most of the times best solution can be found by only utilizing the resources available within the system and not introducing any external resources.

Application of TRIZ in Personal Finance: Characteristic features of the ‘ideal’ solution:

Optimum resource management is extremely important for success. From personal finance perspective intelligent money decisions are absolutely necessary for Financial Freedom. Most of the times people start from similar financial positions. But over the years a huge gap is created between so-called a ‘Rich dad’ and a ‘Poor dad’. Proper Investments on a timely manner, prudent credit management, Financial Risk management, Career management etc. can make one rich. We all know this but very few of us can successfully manage it.

This becomes more challenging in the chaotic world of Information overload. People today have enormous amount of options and this makes decision making extremely difficult. One of the ways to manage this problem is to automate the search process to filter out right information from the huge amount of data and thus reduce noises and simplify information intake. The proposed solution tries to achieve this by integrating different products available in the market as well as few other scenarios which are still untapped by present market players. This solution should have all the possible features to help a user to manage his money on a daily basis.

We can apply TRIZ methodology to envision our ideal Personal Finance solution.

· Ideal Solution – This solution should be ‘ideal’ by incorporating all the features needed.
· Solving Contradictions – Automate the process to solve the contradiction of informed decision making in a world of information overload and huge time crunch in our busy society.
· Best solutions are already available – may be in different markets and product segments. We need to find those solutions to create our own solutions. We should use minimum external resources.
· Generic to Specific – Look for Generic solutions for generic Problems and map them to Customized solutions of Specific problems.

Applying these we can come up with the following features:

1. The user should have all the Finance related data in a single place. So he does not need to waste his valuable time in browsing around multiple channels of information (multiple websites, TV, Magazines etc.).
2. This solution should process huge amount of available data and only provide significant and meaningful information to the user.
3. The solution should be highly customizable. User should be able to change preferences for amount of data, set triggers etc.
4. This solution should minimize user intervention needs for any process which can be automated (Bill payments etc.).
5. This solution should behave as an expert system and advice the user with insightful suggestions, alert any obvious mistakes etc.
6. Bottom-line is the user should have complete peace of mind and should be able to use his time in more productive ventures.

Some Case Studies from existing Business Solutions

Most of the present day Personal Finance Software provides the following generic features:


1. Import Account Data
2. Reconcile Accounts
3. Online Banking
4. Bill Pay Service
5. Split Bills/Expenses
6. Categorize and Track Spending
7. Standardize Payee Names
8. Budget Expenses
9. Write/Print Checks
10. Find Loan Rates
11. Free Credit Report
12. Exchange Rates
13. Connect to Paypal Accounts
14. Connect to 529 Accounts


15. Cash Flow Reports
16. Personal Investing Reports
17. Tax Reports
18. Net Worth/Balance Reports

Financial Calculators

19. Loan Calculator
20. Mortgage Calculator
21. Savings Calculator
22. Refinance Calculator
23. Home Equity Calculator

Personal Investing

24. Import Investment Account Data
25. Portfolio Manager
26. 401K Manager
27. Download Stock Quotes
28. Displays Stock History

I will discuss few other present market offerings and improvement areas in detail and discuss how the integrated look of all these market offerings can create a wonderful tool for users.

Case 1: Bankofamerica My Portfolio

This is a FREE service offered by Bankofamerica (BOFA) to all the Account Holders.1 BOFA has partnered with many other financial houses to provide their Accountholders a complete view of their portfolio. Please refer to the screenshots below.

This gives a fantastic spending history pattern for Card members. But these details are history data which means actual spending only.

Improvement Areas:

Two views can be implemented in My Portfolio service. One Planned Expense (as done in mvelopes) and one Actual Spending. Also we can have different tools for Analytics purpose like Planned Spending vs. Actual Spending, Percentage Target achieved (Cheer up the user if more than 90% achieved), Transactions which could have been avoided (will guide users to make informed decisions). These add-ons can help the users to be on track in managing their money.
We forget things starting from paying credit card bills on time to pay the premiums for insurance. Either all these can be automated or at least alerts for different triggers can be setup. This gives users complete peace of mind!
Can have Mobile applications where the users will get multiple SMS alerts (snooze the alarm type facility where you will continue warning till you complete the Action items).
Also the Users can add different other Customized alerts like as they like it.

Case 2: Best Value for Money offerings

Benjamin Franklin said, ‘A penny saved is a penny earned’. Many of the present day Personal Finance solutions do not offer the Best value offering search option.

Helping customers to save money on high value transactions is another way to show that we Care for them.

User may like to buy high value commodities like TV or car or want to plan Flexible vacation plans when the Fare is Lowest. The Service provider can partner with different Deal sites ( to sell Co branded products (on Profit sharing model).
American Express FareWatch service for Cardmembers where the Cardmembers can save their Target Travel Plan and if the Fare goes down to that trigger level they will get an alert.

Farecast will suggest whether to Buy or Hold an air ticket purchase based on Historical Air Fare patterns. 3

Also this tool should analyse the past spending data and help consumers to appreciate how they could have saved money by buying the same product or services from some other vendor.

Case 3: (It was awarded PCWorld 100 Best Products for 2006)4

This is a subscription based service where they allow users to track their money before they make the actual transactions. So here the users can plan their Personal Finance and keep track of the spending and investments. The basic philosophy here is to plan and track before you actually spend it.

Improvement Areas:

The Net Worth page of Mvelopes can be extended to any Future Date based on Planed Cash flows. The main idea is that bulk money transfers are mostly Pre-planned and hence accounted beforehand. Meaning based on my planned expenditure and Investment Return assumptions I should be able to predict my Net worth 3 months down the line. This may be helpful for Future Financial Planning.
Should have provisions to manage FOREX and multiple currency transactions. This should be very helpful for corporate clients and MNCs for Capital Management. This way this product/offering can be extended to Corporate Accounts as well.
Should have capability to track different Receivable/Payable management system like billmonk.com5

Case 6

This is a fantastic portfolio management service and best thing about oneycontrol is it is absolutely FREE.

Improvement Areas:

Moneycontrol has some problems in the calculation of Return on Investment (ROI) numbers for Dividend Payments (Meaning the Software is not able to count Dividend Reinvested or Paid Out correctly in ROI calculations).
Suggest Asset Allocation suggestions based on the Risk-Return Payoff and Life-goal needs of the user. Add different other Asset Management tools (Charts/graphs etc. for Best or worst investments) or Calculators. The Bank can Cross sell its brokerage wings for this kind of services.
Can Partner with Tax Planning companies for cross selling Tax Planning services.
Can be extended to Private Equity, Venture Capital, Hedge Fund, Art, Commodities and other Alternative investment routes.
May include even intelligent Donations (from Tax treatment perspectives) and Estate Planning.
Should advice the user based on Personal Profile and Market outlook (Personalized recommendations).

Case 5: Providing Market Intelligence with Market News Feeds, Analyst Recommendations, Different Financial planning tools etc.

For a one stop solution of Personal Finance it is necessary to have all the Market Intelligence in a single place including all the Financial Headlines, Analyst recommendations, Planning tools(like buy or lease etc.).

This can be achieved through RSS like features like Google reader7 and standard tools available in market.

In ICICIDirect.com8 different research tools are available:

Case 6: Service Providers

Service providers can make money from Subscription payments from users or from Profit sharing opportunities if they plan to cross-sell offerings from vendor partners and keep the service FREE to the end-users. Data warehousing facilities can be built from the user Financial data to provide customized service offerings. For example if the spending pattern unfolds that the user has interest in eating out customized local restaurant advertisements can be displayed.


Many of the TRIZ patterns can be found if we analyze the above solutions:

Solving Contradiction: For smart Financial decision making one need to analyze huge amount of data. But in today’s world time is a premium and presently people compromise on the research time. But TRIZ supported innovative solutions try to remove contradictions. Here we have followed a similar path by automating this search phenomenon. This expert system will research all the available data feed and make informed decisions and display only the chosen suggestions to the user. This way the user can save time without compromising on the quality of research.
Customizing Generic Solutions (Best Practices) to Specific Problem areas: Multiple alert systems (‘Snooze’ facility in our normal alarm clocks) is a great example where we have taken solution from other areas and incorporated in our solution. In today’s scenario we also receive alert systems for Credit Card Bill Payment etc. In our busy lifestyle we may still sometimes miss those alerts and need to pay late fees. But if we can introduce a system where we will continue to receive alerts till the time we pay the bill our odds will be much better.

Using existing resources naturally and minimizing external intervention: Our ‘Ideal’ system will be an expert system handling day to day operations automatically without any user intervention. This system will have the intelligence to pay the bill on-time, execute scheduled transactions, alert the users in case of emergency, make intelligent Financial decisions for low value transactions etc. This will provide the user a complete peace of mind.


The Ideal solution is still not in the market. But we can surely have a close to ideal solution if we can consolidate all the existing market offerings. With the progress of time we will come up with the new features and new market offerings. Continuous research following TRIZ methodologies should be adopted to improvise the existing solutions.


Ideas from existing market offerings have been reused in this article wherever necessary.