Robotics - The Future of Finance

Robots may have already reshaped the manufacturing sector; as an example, in the automotive sector, robots already play an important role. However, when it comes to the financial sector, the role that robots may have to play is less clear. Today's financial services sector is a high volume, highly regulated business where there is tough competition and many market challenges. Robotic process automation (RPA) can help meet the challenges of today's financial services industry.

What is Robotic Process Automation?

RPA involves replacing the human workforce in areas of high volume and repetitive tasks. This can help bring about cost efficiency. According to a report published by Ernst & Young titled 'Robotic Process Automation in the Finance Function of the Future', robots can lead to reduction of costs by as much as 50-70 per cent. RPA can also bring accuracy and consistency, and can help businesses redirect skilled human workforce on creating additional value.

How can Robots in Finance Help?

It is possible to use Robots to streamline existing processes in finance. Using RPA can help get rid of duplication, inefficiency and inconsistency. Some areas where RPA can be efficiently used are billing and collections, reconciliations, inter-company transactions, financial and external reporting, treasury, budgeting and forecasting, etc.

Robotics also have a role to play in risk management where they can help identify areas of risk and examine credit limits and breaches in the risk policy.

To conclude, the way financial services are shaped today will rapidly change as process automation becomes ubiquitous. We can hope for an era where there will be lower costs, better regulatory compliance and freeing up of human resources for creating more productive, agile and value-oriented financial services companies.

How equipment financing works?

The right equipment is vital in core sectors of the economy like infrastructure, manufacturing, construction, etc. In a growing economy like India, which is still in the process of building itself, equipment finance plays an even more important role.

What is equipment finance?

Equipment finance helps businesses obtain use of equipment like machinery and vehicles on a lease or a hire-purchase basis. A lot of this machinery is expensive and capital intensive; by opting for equipment finance, businesses can stagger payment for this equipment over time and still preserve liquidity.

What does SEFL do?

Srei Equipment Finance Limited (SEFL) is a pioneer in the area of equipment finance. The company helps a wide customer base ranging from first time buyers of equipment to large construction companies in asset financing of equipment in various industries including construction, information technology (IT), infrastructure, etc.

SEFL has developed long-term relationships with a diverse customer base and today, operates from 89 locations in India and services the needs of more than 60,000 clients. The diversity of the company is reinforced by its presence in the healthcare, IT and Farm equipment segments.

Holistic Solutions for growth

SEFL is not just an equipment financier but a holistic provider of solutions. The company helps customers across the whole life cycle of an asset, right from the stage of procurement to disposal. In order to provide support at each stage, services that are provided range from equipment rental, asset management, valuation and disposal services.

Helping businesses find the right tools for growth is essential for not only developing profitability of individual businesses but also for fueling the growth of the nation. SEFL helps its customers by giving them access to the tools and equipment they need today to get started in their respective fields of operation. However, SEFL is not just about equipment finance; the company is focused on a true partnership, where it helps businesses utilize their assets optimally.

Myths about Bond Market Investments

Shattering the aura of a myth is important when it comes to investments because obtaining the right knowledge can lead to empowered investors. Just like every other investment, even bonds are steeped in myths, which can lead to wrong perceptions. When it comes to investments, information truly is power. Here are some myths about bond market investments, you need to be aware of:

Myth 1: Higher rated bonds are always safer:

It is true that debt market investments like bonds are relatively safer than more volatile equity investments; however, when it comes to bonds, a lot of emphasis is on the ratings given to bonds. Unrated bonds are the riskiest and lower rated bonds are riskier than higher-rated bonds. However, many a times lower rated bonds are also good investment options. A triple A (AAA) rated bond usually signifies that the issuing company has a stronger capacity to meet its financial commitments but it is not a guarantee against default. Before investing in a bond it is always better to check the background of the issuing company.

Myth 2: Fixed deposits are safer than NCDs:

It is a myth that company fixed deposits are safer than Non-Convertible Debentures (NCDs). While secured NCDs are backed by the assets of the company and are considered to be 'senior' debt, company Fixed Deposits (FDs) are not backed by assets and are considered 'junior' debt. If the company goes bust, secured NCD holders will be paid before fixed deposit holders. You should also note that NCDs are rated by rating agencies, while FDs are not. Additionally, NCDs are also listed on exchanges which means they have a higher level of liquidity.

You should be careful before you invest in any asset. However, while choosing assets for safety, debt should still receive your primary consideration. If you know about the nature of bonds and what possible risks exist in bond investing, you can be a more confident investor and be more relaxed about your investment decisions.

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