Tag: finance elearning

09 Sep 2021
finance elearning

Use finance elearning to avoid banking frauds

Finance eLearning has become one of the mainstream changes for banks because of the landmark developments in this sector. This is the time when the e-learning companies in the US can have a progressive time. The reason there was a financial recession in the year 2008 was that BFSI employees suffered from a lack of knowledge. If the employees are made to understand their roles in the context of their effect on customers, they will adhere to compliance training. This will affect their organization as a whole because it will successfully follow the compliance rules generated by the apex banks and the government. I.e., the regulators.

The e-learning companies in the US with their comprehensive finance e-learning courses can help the compliance teams of banks.

Two incidents, in particular, have been responsible for the awakening of the BFSI industry to the imperativeness of finance e-learning.
Great Recession 2008

The Great Recession of 2008 as it is called happened because financial companies embarked on too many risky ventures like the Shadow Banking System, which includes the activities of these institutions as financial intermediaries. These financial intermediaries facilitated the lending process by serving as a middleman between the borrower and the lender. The financial institutions eased up the creation of credit across the global financial system but their activities were not subject to legal control. These activities include borrowing against unlisted derivatives.

When the financial institutions could not get the invested money in the purchase of such instruments by their buyers, their credit flow to consumers was adversely affected. So, if the BFSI employees were given adequate financial training they would not have sold such perilous financial instruments to American consumers.

There were also Credit Default Swaps where the banks sold CDS instruments to lenders as per which they were liable to pay them on a borrower’s behalf in case the latter defaulted on his loan. A CDS can be a safe instrument unless the borrowers stop paying their interests for them to the lender. As per this instrument, the lender, who buys CDS pays insurance premiums to the bank, which sells them so that the former’s loan repayments are safeguarded when anything unfavorable happens.

Hence, the BFSI executives must be aware of the lending norms and assess the risk carefully for which finance e-learning is crucial.

As a result, there were amendments in which securities could be registered and traded. It was done to safeguard the money of innocent American citizens.

There were changes in Regulation D of the Dodd-Frank Securities Act of 1933 especially to change the definition of an accredited investor. As per this change of definition, an accredited investor could not be someone who has a primary residence to prove his net worth. This asset could not be counted as part of his net worth to issue a security.

Hence banking employees had to be informed of this change through finance e-learning so that they had cognizance of what is a registered security.

There has been a detailed survey in which it was found that BFSI employees do consider improvement in knowledge critical for making sure that their institution is saved from risks. The finance e-learning can make sure employees know about compliance training. There might be a limitation on what intradepartmental knowledge transfer can happen in banks, but such employees should be acquainted with policy changes.

Nirav Modi-PNB fraud

For example, a similar kind of financial crisis happened in India because of unsupervised lending by a bank and in the aftermath, these institutions were asked to integrate their internal software into the advanced SWIFT interbank messaging system. Such interlinking implies that whenever banks communicate with the international banks, the RBI knows of it. This kind of regulatory action was needed because 1.77 billion dollars were lost by international Indian banks in loans to Nirav Modi who defaulted and later fled. PNB, whose Mumbai branch employees were responsible for this fraud, said that the latter didn’t enter any kind of illegal transactions in the bank’s banking software. If the issuance of these LOU’s was recorded in PNB’s software, it would have discovered the ongoing fraud in time. These illegal transactions happened when those two employees generated unauthorized Letters of Undertaking to Nirav Modi to get credit from overseas branches of PNB. As per these letters, Nirav Modi was supposed to provide PNB with margin money which didn’t happen. The Letter of Undertaking is generated by the issuing bank so that its customers could be given a short-term credit by a foreign bank to pay money to their overseas vendors. However, this credit is given for a limited period, which is 90 days. If the PNB Mumbai’s bank employees had been aware of the rules associated with an LOU through finance e-learning, they would not have committed such a fraud.

SWIFT is a software developed by Belgium based company and is used for communication between banks located all over the world.

 

08 Sep 2021
finance elearning

Ease loan origination with finance e-learning for bank employees 

The banks are keenly trying to get more customers on board for themselves. These institutions are devising loan products for customers, but, when it comes to technology they are stuck. But now there have been revolutions in LMS in banking like the invention of the loan origination system (LOS). The loan origination system has been prepared to make sure that banks don’t face any issues while giving loans. As far as a LOS is concerned, it provides leads about loan applicants to banks because it’s amalgamated with the website loan application form. So, this software ensures that the banks can integrate all the information about the borrower and even check their credibility and documents. A conventional LOS checks all the requirements which are crucial for a bank while giving loans. The LOS also sends an autoresponder email to the prospective borrower when the bank either approves or rejects the loan. This kind of banking software reduces the need for banking executives to use third-party applications in the loan appraisal process because they are integrated with it. Such software saves a bank a lot of manpower.

Permanent storage of customer information

The banks can make sure that the customer document files are not lost when they are stored in a LOS. Hence the customer documents complemented with an e-signature are stored in a LOS. As soon as a customer document is uploaded to an LMS, the verification workflow starts, and the third-party confirmation is started. The prospective borrowers are then given scorecards about their credibility prospects in the LOS.

When the customer data is stored online, it can be accessed in the future also.

The banks need to provide finance e-learning to employees so that they easily operate such software.

No need for manual verification

A LOS is a feasible option for banks that don’t have time to install heavy third-party applications. When the banks have fast systems for assessing customer eligibility for loans, they can get a faster entry into the lending market. With a LOS that’s installed on a web server, there’s no need to get an in-house server.

But there is a need for finance e-learning so that bank employees can access such software from their homes and learn about new loan applications. This kind of elearning is useful for employees so that they don’t have any dearth of knowledge but using systems such as LOS.

Easy accessibility of data

Since the data in a LOS hosted on a cloud-based server is accessible anywhere, it eases up the process for bank employees. It ensures that they don’t have to conduct manual verification, which is also relaxing for customers because they get a speedy response to their loan applications. With this LOS, where everything is automated including document management, loan verification, the bank employees don’t have access to third-party websites for processes such as identity verification, employment background check, and fill up their website forms.

How can finance e-learning be useful?

Scanning and uploading documents

Finance eLearning can be used by bank employees to use such software for document uploading and informing the managers about any document discrepancy. They can also search for the documents easily because LOS stores them in a database management system and hence they are searchable through the primary keys attached to each customer record.

Later, when the customer asks about where his loan processing is, they can send the status updates to him after assessing the LOS. If a customer is late in document submission, the banking employees can also initiate a chat with him through the LOS to know the reasons for the delay.

Informing customers

Since the phone numbers of the customers are stored in the LOS, they can be scheduled to receive automatic SMS about the status of their loan application. Any change in bank policies, holidays, and interest rates can also be relayed. All the SMS details of the customers are stored in this software to ensure that the banks have all their history with them.

Know about interest payments

The banking employees also learn about loan servicing through this software via finance e-learning. The software sends automatic emails to banking employees and borrowers when the interest payment is due. So, if a borrower does not meet his interest obligations, in time, they can inform the bank manager about it and hence downgrade his creditworthiness. The banking employees must also know how to check whether a customer has sent a wire transfer for meeting his due interest.

If the customer is behind schedule on his interest payments, the bank executives receive all the information about the late payment fees through the LOS. Interest payments can also be expedited when there are customer portals established for them. They can be integrated with the bank LOS and enabled through finance e-learning, banking employees can guide customers about using such portals. Even chatbots can be used for customer interaction.

Analyze banking flows

The critical aspect of finance e-learning is that it’s useful for banking managers also because they can decide the portfolio of such institutions. When you get reports about cash flows of different kinds of borrowers, from retail to individual, they can analyze what kind of profits are made by them. Any kind of misbehavior can also be recorded for future lending purposes.

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DSLR stands for Digital single-lens reflex camera. It has a digital imaging sensor. In this kind of camera, the captured image can be viewed in the viewfinder when the shutter button is pressed. Its shown through the main lens rather than through a secondary lens, so the user knows what has been captured. 

He was a German psychologist who is known for discovering the forgetting curve. According to this curve, the biggest decline in memory happens within 20 minutes, and then 1 hour.