Agile FINANCIAL TIMES

June
2009

Insurance Technology
in Africa

CUSTOMER SPOTLIGHT
Driving the Business at
Cholamandalam Mitsui Sumitomo

PERSPECTIVE

Little Green Shoots

of Recovery?

PARTNER SPOTLIGHT

Building Bridges in
Bahrain
 June 2009

Editor’s Note
Greetings!

We have added more products to our growing suite of

CONTENTS
banking and financial solutions to cater to our
markets in Asia, the Middle East & Africa.
CUSTOMER SPOTLIGHT
Innovative Financial Planning on Surface Tables!
Driving the Business at
A complex subject like Financial Planning made easy
to understand in a relaxed and interactive way, for Cholamandalam Mitsui
your clients, by using pioneering new technology of Sumitomo 4
Microsoft Surface. Imagine sitting across a big table
with your financial advisor and instead of staring at charts, graphs and numbers COVER STORY
that are not easily comprehensible; the table in between itself converts to a huge
canvas of life where you can touch and visually translate your life’s goals Insurance Technology in
(comfortable retirement, children’s university education, dream house) into Africa 7
achievable plans.

PERSPECTIVE
Agile FT is keen to contribute to the emerging world’s economy across all
realms. So while we added Financial Planning for the HNWI segment, we added Little Green Shoots of
even more MicroFinance solutions for the unbanked and often forgotten roots Recovery? 10
of our society - the humble labourer, the over-worked maid, the round-the-corner
tailor, the family barber….to help them achieve their dreams too (steady rations,
NEWS
basic schooling for kids, ‘pucca’ house).
Global Update 14
Dreams big or small (whether for a yacht or a hut) are what keep the human
spirit alive. Services should be tailored and made available for all to achieve
them. If the poor cannot come to the banks, we provide mobile technology to ARTICLE
enable banks to go to them, right to their village compounds and labour camps.
GCC Women’s Savings:
While we look towards empowerment of the poor, we are equally keen on
Can it Boost the Region’s
empowerment of women. In this edition is an inspiring article from Dr. Manahel Economy? 16
Thabet who presents an insider’s view of the glass ceilings faced by women in
the Gulf and how to overcome them. She is living proof that dreams are PARTNERSHIPS
achievable with the right environmental support as she broke into the traditional
male bastion of trading and became a leading female trader to reckon with. Partnership
Announcements 18
So let us all dream, achieve, inspire and most importantly enable others to do
the same….wishing you all a wonderful time whether getting rain soaked in
SOLUTION SPOTLIGHT
Lagos & Mumbai, or enjoying the pleasant winter of Harare, or just plain
shopping in the air-conditioned malls of Dubai! Investment Management
from Agile FT 20
Be Agile!

PARTNER SPOTLIGHT
Shefali Khera
Chief Marketing Officer Building Bridges in
Write to us at info@agile-ft.com Bahrain 22

Cholamandalam MS is a joint venture between
The Murugappa Group and Mitsui Sumitomo
Insurance Group of Japan. Set up in 2002, it is
the fastest growing general insurance player in
the country. Its earned premium increased by
68% to INR 5,220 million in FY08, up from INR
3,120 million in FY07. The company’s market
share increased to 1.88% in FY08, compared
with 1.25% in FY07.
Committed to using the best technology, the
company selected AGILIS - an enterprise level
solution from Agile Financial Technologies for
general insurance companies.
4
CUSTOMER SPOTLIGHT
Driving the
Business at
Cholamandalam
Mitsui Sumitomo
India enjoys the fifth largest general insurance market size in
Asia, in terms of premium earned, after, Japan, Korea,
China and Taiwan. Although India has the second largest
population in the world, it has one of the lowest insurance
penetration rates for property and casualty insurance (P&C).
The economic potential of the country continues to be
among the highest across emerging markets and therefore,
the current under-insurance in the market is expected to be
a key business driver.
Along with low penetration levels, significant scope for
products and services innovation and increase in consumer
awareness for risk management are other key drivers. The
evolution from a tariff-based regime to a free price level
playing field has resulted in companies designing their own
products. This has taken the general insurance industry to a
completely different paradigm in terms of products
innovation and knowledge-based risk management.
However, implementing systems that can cater to new lines
of business such as weather insurance has become a
challenge. Further, several operations in the public sector
companies, as well as many private ones as well, are still
carried out semi-manually, resulting in a high error rate, slow
turn-around-time and limited ability to quickly introduce
new and innovative products. With technology enabling a
competitive edge, there are opportunities for insurers to
further increase market share and build a framework that can
cater to new and innovative product development.
Competition is expected to increase with the entry of
foreign players. “There is a definite threat of foreign players
entering the market without Indian partners. The insurance
sector is already in the process of opening up further to
allow 49% investment by foreign companies, up from the
current 26%”, says S. N. Roy, CIO, Cholamandalam MS.
 CUSTOMER SPOTLIGHT

After the opening up of the insurance sector, private players have successfully
garnered 25% of the market share. Further, deregulation has also resulted in an
increased competitive landscape and is expected to increase. While competition
has resulted in new products with additional features, it has also led to a
lowering of prices in the form of discounts, commissions and add-on offers.
Hence, profitability has been impacted and profit margins have declined across
the industry. Therefore operational efficiency is now extremely important.

To gain a competitive edge, Cholamandalam MS was looking for a world-class

enterprise-wide solution that could help the company penetrate existing and
new markets, increase market share and successfully scale up to address
evolving requirements. More specifically, Cholamandalam MS was in need of
state-of-the-art technology that could respond to more complex issues of
general insurance, such as floaters, group insurance policies, foreign exchange
fluctuations and reducing turn-around-time.

Of the two competing products considered by Cholamandalam MS’ Project

Team, led by S. S. Gopalarathnam, the current MD, one was incomplete and
needed significant changes. The other product did not appear suitable as the
user experience reported by one of its customers was adverse, with the
customer unable to align and orient technology with the business. Hence
AGILIS became the best fit for Cholamandalam MS’s requirements. “I would
say that what we selected (AGILIS) was the best”, says Roy.

“Cholamandalam MS selected Agile FT because they could see the passion

within each associate for this product. Every question asked by
Cholamandalam MS was answered by associates through the system,” says B
Rangarajan, ED & Head - Product Management, Agile FT, a sentiment which
is echoed by Roy as well.

In addition to technology expertise, Agile FT possesses significant domain

expertise as well. “When I spoke of complete dedication, I was talking about
mastery over the intricacies as well. What we saw from the Agile FT team was
complete knowledge of the industry. I found them to be extremely
knowledgeable, holding their own against people who were decades ahead of
them in terms of experience,” says Roy.

AGILIS is an integrated on-line IT solution designed to implement all the

functions of a general insurance company. It acts as a decision support system
for underwriting, claims, reinsurance and accounting and, as a result, directly
enhances the business processes of an insurance company. The solution is
flexible in terms of defining new or revising existing insurance products and
facilitates dynamically altering the process in time with the market conditions.
AGILIS has the ability to cater to all classes of the general insurance business. “I would say that
The implementation of AGILIS has resulted in several business benefits to what we selected
Cholamandalam MS.
(AGILIS) was the

The first Portal approach in Indian retail general insurance was a high-speed
Motor Insurance page. In February 2003 this started a chain of Process best”
engineering which then led to many other service accelerators.

The unique design of the travel insurance module helped Cholamandalam
MS increase its market share to over 75% in the travel insurance segment.
Cholamandalam MS became one of the first companies in India to issue a - S. N. Roy
motor insurance policy within two minutes as compared to the competitors’
4-5 minutes, resulting in additional business. “Cholamandalam MS is the CIO
first insurer in the country to issue a travel policy in two minutes.” says B
Rangarajan. A substantial reduction in turn-around-time, to a few seconds, Cholamandalam MS
5

attributable to innovative product design and simplicity
of operating the system, was the main contributor to the
increased market share. “We sometimes issue three


policies together in eight seconds!!” says Roy.
AGILIS effortlessly scaled up to cater to
Cholamandalam MS’s multi-fold increase in business and
the introduction of a large number of new products
without having to upgrade or undergo any software
changes. Viewed historically, this also meant that
Cholamandalam were able to start with low hardware
investments and scale up gradually.

Agile FT configured a unique indexing method which
could retrieve complex data at high speed and high date
security from the back-end database, enabling quick
management reporting. This unusual and uncommon
technique is really a unique service proposition.

The Accounts module of AGILIS, incorporated
information from all the other modules, and presented
an output that would normally require a full fledged
Accounts department. “Cholamandalam MS has a very
small Accounts department. Our closest competitor’s
Accounts department is many times bigger than ours,”
says Roy. Hence, Cholamandalam MS today has one of
the smallest accounts department in the general
insurance industry, giving it substantial cost savings.
The implementation of AGILIS helped Cholamandalam MS
garner significant incremental business, especially in travel
and motor insurance.
A substantial reduction in turn-
around-time, to a few seconds,
attributable to innovative
product design and simplicity of
operating the system, was the
main contributor to the
increased market share.
AGILIS managed to bring down the turn-around-time
substantially, leading to increased market share. It was not
only instrumental in providing business value, but also was a
favorite amongst all users, both external and internal, due to
its ease of usage and flexibility.
6
CUSTOMER SPOTLIGHT
In Brief
Mitsui Sumitomo Lao DPR Joint Venture
Mitsui Sumitomo Insurance Company Limited recently
announced a partnership with the Ministry of Finance,
Lao People’s Democratic Republic, to establish a joint
venture company to offer a range of general insurance
products across business and personal lines.
The joint venture will be called MSIG Insurance (Lao)
Company Limited and will have an initial paid-up
capital of US$2,000,000. The company will be located
in Vientiane and is expected to commence operations
shortly.
Atsushi Yagi, CEO, Mitsui Sumitomo Asia, said, “We
are pleased to be selected by the Lao Ministry of
Finance as a partner to provide general insurance
solutions in the burgeoning Lao market. This
agreement underpins our strength and leadership in
the general insurance industry in Asia. We have a
long-term commitment to developing markets in
Indochina and contributing actively to its economic
growth. Our strong network in the region, including
operations in Thailand, Vietnam and Cambodia, will
be bolstered with the addition of this joint venture.”
Cholamandalam MS Rated as the Fastest
Growing Company in India
After posting a Gross Written Premium (GWP) of INR
526 crore for the period of April - December 2008,
Cholamandalam MS received the distinction of being
the fastest growing insurance company for that period.
The premium growth stood at 36 percent for the
period which was the highest in the industry. Its
market share increased from 1.85 percent in March
2008 to 2.31 percent in November 2008.
The company management believes that this
achievement is even more remarkable in the face of a
challenging macroeconomic scenario which has seen
a recent decline in vehicle sales. The company has
also made conscious attempts at portfolio
rationalisation through prudent choice of business in
loss prone areas of group health, dealer business and
small and medium business.
 The potential for insurance in
Africa is very high as the
continent has a population of
almost 700 million or 14.8
percent of the world’s
population and occupies 6
percent of the world’s total
landmass.
The contention is that if Africa
can realise even a part of its
economic potential, it might be
possible to generate, at the
minimum, between 6 to 10
percent of the world’s gross
premium income.
Insurance
Technology in
Africa
A significant enabler for industry growth
The Nigerian National Insurance Commission (NIC) announced a few years ago
that capitalization requirements would be raised significantly for insurers, the aim
being to create stronger financial entities, and provide a more solid foundation
for the Nigerian economy. Despite their protests, insurers embarked on
complying with capital related regulations at a feverish pace; for some insurers,
the strategy to raise capital included merging with other companies. In addition
to raising capital, the Nigerian authorities also wanted insurers to increase their
focus on the retail business, especially life, health and motor insurance, and not
restrict themselves to the traditional corporate insurance business. In their quest
to garner a share of the retail insurance pie, insurance companies in Nigeria
realized the need to start investing in technology to enable their growth plans
specifically on the retail side.
In Kenya, with the Insurance Regulatory Authority (IRA) becoming operational
in late 2007, insurance companies are required to have a paid-up capital of at least
Kshs 300 million for general business, Kshs 150 million for life business, and
Kshs 450 million for composite insurance business, by June 2010. The Margin of
Solvency of long term insurance companies was amended in line with the
recommendations from the Association of Kenyan Insurers (AKI). According to
7

AKI, Kenya recorded a GDP growth of 7 per cent last year,
which was higher than the previous year, as well as higher
than African average of 5.7 per cent. Combined with this,
insurers are now under pressure to complete activities within
a certain mandated time frame, an example being settlement
of claims within 90 days after liability has been determined
by a court. While it is envisaged that this will make insurance
companies more customer oriented, it also lays a foundation
for a technology-enabled process to be put in place to avoid
regulatory penalties.
The South African market is also growing at a good pace
and is rated amongst the world’s top ten insurance markets.
According to Celent, in FY 2008, the total premiums
collected were ~US$ 42 billion i.e. 1% of global premiums.
In the current year, the South African market has suffered a
slowdown and the majority of the African insurance markets
are expected to post flat growth in this year.
Growth Drivers and Key Business Challenges
The potential offered by the African market has attracted
both domestic and foreign investment in insurance and
currently, major insurers are in the process of revamping
business strategies in their quest for higher insurance
penetration. The ensuing challenge for all market
participants will be in developing, maintaining and
increasing market share. A key theme in the insurance
industry which is expected to dominate the better part of
this decade, is a larger bouquet of products especially
targeted at under-penetrated customer segments and an
increased focus on developing low-cost distribution
channels. Insurance companies are now getting much more
customer conscious, are actively seeking to move beyond
‘plain vanilla’ products, and are developing risk profile-based
products. African consumers are also becoming more aware
of different insurance products worldwide through
increased usage of internet and globalisation. Companies are
expected to focus on innovation in both, product and
channel development to gain competitive advantage. While
theoretically there are sufficient growth drivers, some
systemic issues exist within the industry which insurers have
to grapple with, while seeking profitable growth.

High insurance costs: The cost of insurance is
increasing quite rapidly. According to Genesis Analytics,
~50% of the policies lapse within an average period of
two years in South Africa. The value of individual
policies lapsed increased by 40 percent in FY 2008.
There is an immediate need to trim costs to remain
afloat because the price elasticity of demand for
insurance products in Africa is very high.

Under-developed distribution channels: There is a
lack of proper distribution channels. Cost pressures
coupled with penetration imperatives have resulted in an
increased interest in channels like retail networks,
bancassurance, and internet/mobile access. For instance,
distribution in the Nigerian insurance market is expected
8
COVER STORY
to be an issue as insurance brokers have high influence
and command 80 percent of the non-life business, thus
leading to higher commission expenditure for the
insurance companies.

Low consumer awareness: Issues in distribution are
translating into lesser consumer knowledge. There is an
acknowledged lack of information on insurance
products. Consumer awareness on new product
launches, the nature of the insurer, returns and risk
factors is relatively low. As a result, insurance clients are
very often unable to distinguish between products.

Premium collection hurdles: There aren’t many easy
payment options in the African insurance industry.
Facilities such as online and mobile payments are
available with only a small percentage of the population.
The industry is also characterised by inadequate
collections and high receivables.

Slow claims processing: According to Road Accident
Funds (RAF), a government organisation in South
Africa, slow processing has often created huge backlogs.
For instance, in 2008, RAF employed a staff of 1,700
and had a backlog of ~380,000 claims waiting to be
verified.

Regulation: Regulation is driving considerable change
in the industry. In the recent past, regulation-driven
product development has been a key theme, such as
Zimele-approved products announced by the Life
Offices’ Association of South Africa (LOA). Zimele
products are designed for the low-income sector
(representing ~65% of the country’s adult population)
and have been driven by the need to provide greater
access to life insurance. When launched, the LOA aimed
to provide at least 22 percent or 3.8 million low income
earners with life insurance over the next eight years.
Most of the major insurers have recognised the potential
of the Zimele market. However, a key concern for them
will be in making the opportunity profitable, given high
lapse rates and distribution costs.
Therefore from the insurers’ perspective, operational
capabilities have to improve to increase revenues and
profitability. The speed with which insurers can embrace and
adopt change related to products, operations and
distribution depends on the technology available to service
it. In this regard, it is pertinent to note that African insurers’
adoption of new technologies has been relatively low and a
big bottleneck has been their usage of old and inflexible
legacy technologies. Large insurers in Africa are
characterised by the adoption of several core systems which
are heavy on maintenance, apart from being inadequate to
service current needs of speed and innovation.
A Significant Enabler for Profitable Growth
To stay customer focused and profitable, insurers have
recognised the need to migrate from legacy and in-house
systems to newer technologies. There are various factors that
should be considered.
 COVER STORY
Rapid Product Development
The primary drawback of legacy systems is that they are
expensive and inflexible. The benefits from new product
development can be easily wiped out from the excessive
costs associated with legacy system maintenance. As product
development is a prime instrument to keep companies a step
ahead of the competition, it is imperative to switch over to
systems which can support product and growth strategies at
the tactical level. For instance, a leading South African
insurer had earlier introduced only one new insurance
product in three years, but competitive pressures forced the
company to replace its legacy systems with new modular
application infrastructure. As a result, the company was able
to introduce nine new products in the market, taking the
competition by surprise. Insurers have gained competitive
advantage by developing new payment options like scratch
cards and payment facilities through mobile phones by
replacing legacy technologies.
Keeping Operational Costs Down
While African insurers will seek and develop growth areas,
three factors will continue to pressure rates and
subsequently profitability - the nature of the market (low-
income dominated and regulation-mandated), competition
and recessionary pressures.
Further, solvency ratios are under threat, given the volatility
in equity markets. Therefore, it is vital that insurers are able
to manage operational costs in these conditions to drive
profitability, keep operational costs down to the bare
minimum and offer insurance policies at lower costs to cater
to consumers across different price points. With legacy
systems, maintenance costs tend to be high because of
various levels of duplication on account of fragmented
systems and declining availability of the required skill sets.
To illustrate, it is estimated that systems which can
streamline operations and provide seamless connectivity
between branches can be expected to bring operational costs
down by 30-40 percent and reduce application development
costs by half.
Another example is micro-insurance, which has come to stay
in Africa, and for which the supporting IT infrastructure will
necessarily need to have a significantly different cost
structure from the current legacy systems.
Improve Reach and Coverage
As noted earlier, distribution remains a challenge. Insurers
have had to think of ways of increasing reach across various
geographies without incurring huge distribution costs, and
without depending extensively on the insurance brokers and
agents. This has led to the emergence of new channels like
mobiles, voucher cards, internet and bancassurance. These
alternate channels, while enabling companies to decrease
overall policy issuance costs, are often difficult to integrate
seamlessly into existing systems.
Faster Claims Processing Without Linear Cost Increase
There is significant scope for improving claims
management, as claims processing ability remains a key
competitive differentiator for insurance companies. Legacy
systems do not have the bandwidth to cater to large chunks
of claims processing. The backlog of un-processed claims at
most insurers is high and current trends indicate a definite
shift towards technologies which support speedier
processing.
Regulatory Compliance
The African insurance industry is among the most regulated.
Regulatory scrutiny continues to intensify and evolve,
increasing the quantity and complexity of compliance. The
cost of compliance can be high and therefore, minimising
compliance costs without compromising on speed and
quality of regulation-related administration is crucial.
Current systems are often not able to respond quickly to
administration and regulatory demands due to limited
flexibility.
Overcoming Challenges of Obsolete Technology
The hardware and maintenance for near-obsolete legacy
systems are increasingly becoming difficult to obtain.
Integration of legacy systems with newer technologies has
become a challenge as well. Further, it is tough to find legacy
system skills as most experts have moved on to work with
newer technologies. While insurers have been quick to
recognise and tap growth areas, more often than not, the
existing technology has been holding them back. For the
African insurance market to fully meet its potential, it is
important that technology not only supports the innovation,
but also enables it. For example, innovation in premium
collection has centered around mobile payments and flexible
billing. These can be implemented only if the back-end
technology is tightly integrated and truly enables quicker
process implementation.
The African insurance industry is set for an overhaul as
competition for this high-potential market gets stronger.
African insurers are changing their product strategies to
work out innovative ways to grow market share. Therefore,
the need of the hour is for technology to deliver beyond
systems catering to disparate processes like policy
management, underwriting, claims management and
premium collection, and display agility in responding to
business concerns. There is no doubt that the quality of
technology implemented is directly correlated with an
insurance company’s success, in terms of both market share
and profitability. African insurers need to ensure that they
have a technology strategy which can deliver on all fronts -
costs, speed, reliability and flexibility.
9

In the last decade, the asset management
industry has weathered various environments.
Fortunes have been made and dramatically
lost all in a matter of a few months. With
various players in the market both on the buy
and sell side, portfolios have expanded rapidly,
offerings have matured, and institutional as
well as retail players have burgeoned.
In advanced economies, the number of
retirement funds has increased in line with the
aging population, while in emerging
economies, fund managers have to meet
investor expectations and offer innovative
products.
In this scenario, predictability is a prized virtue,
with investor expectations met with prompt
updates and alerts, improved distribution
channels and obviously better returns. In
addition to complying with increasing
regulations, asset managers need technology
that can help them build and assess a portfolio
as well as throw up various scenarios to help
them predict the future.
10
PERSPECTIVE
Little Green
Shoots of
Recovery?
Andrew Krieger
Chairman, Agile Financial Technologies
We are witnessing one of the most remarkable periods in
modern financial history. Even the savviest investors are
getting tossed to and fro by the rapidly shifting tides of
market sentiment, gyrating from extreme pessimism to
extreme optimism in a matter of weeks. What is most
notable is that these wild fluctuations are occurring with
hardly any corresponding fundamental shifts to justify the
changing views. Consider for example the recent about-face
of George Soros, arguably one of the greatest investors of
all time. On February 20, 2009, less than three months ago,
Soros noted that the world financial system had effectively
disintegrated. He added that there was no prospect of a
near-term resolution to the crisis and that the turbulence was
more severe than that experienced during the Great
Depression. In fact, he likened the current international
situation to the total disarray which occurred in Moscow
after the demise of the Soviet Union. While speaking at a
dinner at Columbia University, Soros pointed out that the
bankruptcy of Lehman Brothers in September marked a
turning point in the functioning of the market system.
“We witnessed the collapse of the financial system,” he said.
“It was placed on life support, and it’s still on life support.
There’s no sign that we are anywhere near a bottom.” Just a
few days later Soros added that we have seen the end of the
free market economy. “The global economy is melting down.
On previous occasions when the system was severely
threatened, the authorities intervened and set things back on
course. This time it is different.”
I worked with George Soros in 1988 as his “successor” so I
came to understand the man and his thinking quite well. He
 PERSPECTIVE

tends to focus on major themes and major cycles, with a particular fondness for
boom/bust scenarios. George is not one who speaks of global meltdowns and
economic disasters lightly. He also tends to stick with his strongly stated views
quite rigorously, holding firmly onto his beliefs for long periods of time.
Therefore it is quite astonishing that ten days ago, just several months after his
dire forecasts, George abruptly shifted his long term views, noting that the
world had averted a financial collapse and was now poised for an immediate
sharp economic recovery. I was amazed that the master had jumped from a
forecast of economic calamity to a relatively rosy prognosis. Granted, he
conceded that the recovery would be followed by a period of stagnation, but
the economic freefall had been stopped. The collapse of the financial system
had been averted and the national economic stimulus programs were starting
to take effect.

So what happened? What changed in the world to cause this sort of shift in
sentiment? Well, in terms of fundamentals, very little. The economic data
coming out was still horrible, albeit not quite as horrible as some expected. On
the sixth of March, however, almost immediately on the heels of Soros’ doom
and gloom forecast, the global stock markets put in spike bottoms that quickly
led to one of the sharpest price recoveries in history. Although this recovery
has been dramatic, we really need to reflect for a moment and take measure of
where things stand.

Coming into the March period, the world’s major stocks markets had effectively
collapsed from their October 2007 highs, with secondary tops having been
established in May 2008. Using US markets as a reasonable proxy for the
developed Western world’s markets, analysis shows that the combined western
markets haven’t recovered even 50% of the total drop. In the big picture, it is
way too early to know if this is just a technical bear market rally or the start of Andrew J. Krieger began his
something bigger. During the Great Depression, there were periodic stock
market rallies that had remarkable force, but those rallies proved to be short- meteoric rise on Wall Street at
lived and unsustainable. We now know that there was a lot of cash on the Salomon Brothers in 1984,
sidelines waiting to jump into the markets when the economic situation settled then at Soros Fund
down a bit. There were also very substantial speculative short positions, Management, after which he
particularly in the financials, but elsewhere as well. In my thinking, the shorts
finally got squeezed and they had to run for cover. At the same time, the fund moved to Banker’s Trust in
managers on the sidelines were forced into action, so they started buying as 1986. He holds a BA in
well, further fuelling the rally. Therefore, we may simply be watching a bounce Philosophy (Magna Cum
which should be aggressively sold into in case the recent optimism turns out to Laude, Phi Beta Kappa,1978);
be more wishful thinking than sound assessment about improving conditions.
This rally needs to be treated with great caution, even though it may have a bit MBA in Finance from the
more to go. University of Pennsylvania; and
an MA in South Asian Studies.
My experience over a quarter century of trading and investing in multiple Andrew has authored the book,
markets has taught me that the vast majority of speculators and investors tend
to lose significant amounts of money over time due to a) very poor money “The Money Bazaar” in 1992,
management rules; and b) a tendency to trade with little conviction. Over and has been a contributing
relatively short periods of time most speculators are prone to wild mood Columnist for Forbes and
swings, accompanied by ill-formed views of market dynamics and economic Forbes Global. He co-chairs
fundamentals. Bullish views tend to turn bearish with little justification,
resulting in a wild flailing about in the markets, with erratic trading and a stream the Microcredit Summit Council
of losses to match the shifting views. One thing that nearly all speculators have of Banks and Commercial
in common is a remarkable tendency to let their losses run and take their profits Financial Institutions and is
quickly. This simply won’t work over the long haul. I have traded in about Founder CEO of IMGE
seventy markets and a similar number of derivative markets, and my
observations hold for nearly all traders in all markets whom I have observed. Emergency Relief Fund and
(Solid academic studies support my observation, so if you don’t believe MD of Access Capital
me, consult your nearest university.) The lesson to learn is that markets rallies Management.
11

are not necessarily linked with improving economic
conditions.
In today’s environment, even the greatest investors have
been reduced to amateurish thinking; allowing short term
market fluctuations to drive their long term fundamental
views on the financial system. This is important, as it points
to a deep-seated underlying component of fear and
confusion which has affected nearly everyone. Investors
invariably watch market behaviour for clues about how to
interpret fundamental data, but at a deeper level, the best
investors tend to have a strong conviction in an underlying
theme. In February and March, Soros had plenty of reasons
to be scared about the global economy, although he might
have been a touch over-dramatic. It is safe to say, however,
that he certainly had substantial justification for his original
forecast. We touched on a few compelling reasons to be
The truth is that we may be at
the end of a free fall. The rate
of economic decline has slowed.
pessimistic in my column last month, however my biggest
fears have to do with much longer, much more pronounced
imbalances and structural problems rather than shorter term
break downs. In fact, I continue to believe that the
authorities had no choice except to take drastic steps to
stabilise the system and pump enough liquidity into the
financial markets to guarantee their survival.
In truth, if I want to err on the side of pessimism, it is quite
easy. Banks are still heavily undercapitalised and largely
unable to withstand a completely imaginable further
deterioration in the broad economy. Government is still
poised to be overly intrusive and controlling, leading to a
fully undesirable combination of too much regulation and
too little financing, which is bound to create a persistent,
measurable drop in the long-term sustainable level of
economic growth. Debt levels are still too high, savings are
too low, and massive structural global imbalances threaten
the very existence of the financial system, but the day of
reckoning is some time off. The twin deficits of the US are
looming in the background but it isn’t time for them to
come cascading down in a horrible crash, ending the free
floating foreign exchange regime of the past thirty six years.
It would be very easy to create a realistic scenario which
could lead to the breakdown of the system which Soros
spoke about -- a complete implosion in the free market
economy -- but fortunately we aren’t in that place yet. Sadly,
band-aid doctoring by central banks and treasury
departments are increasing the likelihood that one day,
investors around the globe might decide that their faith in
12
PERSPECTIVE
the US dollar is unwarranted, sparking a landslide of sales
and market disruptions that would make last year’s trading
activity seem tame. This eventuality has been put off into
the future, however, so we needn’t obsess over it at the
moment.
More pertinent to our discussion, however, is that in the
short term we need to come to grips with the fact that the
era of plentiful funding by financial intermediaries is long
gone. The heavy hand of government is taking a dominant
position over the invisible hand of the markets, and the
spectre of excessive regulation weighs heavily on my
forecasts. The bubble from the insane over-leveraging of
investment banks and commercial banks, coupled with their
gigantic bet on the U.S. real estate market, has already been
popped. The damage is done and the management of
financial institutions around the world has found its new
religion: conservatism. Regardless of how much regulation
the authorities impose, bubbles will still be created, manias
will still grip the minds of greedy, foolish speculators, and
boom/bust cycles will persist.
Recently I have read numerous articles about the little green
shoots of recovery which are sprouting up around the
world, causing a sudden and sharp surge in investor
sentiment. Rarely have I seen so much excitement about so
little. Last month’s US unemployment data, and the
subsequent market interpretation, was truly amazing. The
non-farm payroll data showed a loss of 539,999 jobs,
causing the jobless rate to jump from 8.5% to 8.9%.
Consensus market expectations were calling for worse
numbers, so the markets reacted with euphoria. Does this
really make sense? An unemployment rate of 8.9% is
catastrophic in many ways. Perhaps in Spain where the
number is now over 20%, 8.9% doesn’t sound so bad, but to
millions of medium-term and chronically unemployed
workers, being joined by an additional 540,000 newly
unemployed is hardly a reason to celebrate. Certainly the 5%
of the working population that no longer even bothers to
look for work thinks this is a disastrous number, let alone the
8.9% who are quickly growing weary of finding any work to
do. Overall economic growth prospects are sufficiently
dismal that it is likely going to be a very, very long time
before the millions of newly unemployed Americans are
going to be employed again. Unemployment numbers in
Europe are the same or worse.
Against this backdrop, as spring comes to America,
optimists are seeing “green sprouts” of recovery from the
financial crisis and recession. The world is far different from
what it was last spring, when the Bush administration was
once again claiming to see “light at the end of the tunnel”.
The metaphors and the administrations have changed, but
not, it seems, the optimism.
The truth is that we may be at the end of a free fall. The rate
of economic decline has slowed. The bottom may be near -
perhaps by the end of the year. But that hardly means that
 PERSPECTIVE
the global economy is set for a robust recovery any time
soon.
This downturn is complex: an economic crisis combined
with a financial crisis. Before its onset, America’s debt-
ridden consumers were the engine of global growth. That
model has broken down, and will not be replaced soon. For,
even if America’s banks were healthy, household wealth has
been devastated, as Americans were borrowing and
consuming on the assumption that house prices would keep
rising forever.
The collapse of credit made matters worse, and firms, facing
high borrowing costs and declining markets, responded
quickly by cutting back inventories. Orders dropped
abruptly - well out of proportion to the decline in GDP -
and those countries that depended on investment goods and
durables (expenditures that could be postponed) were
particularly hard hit. The massive destruction of stock
market wealth should make investors appreciate risk better
rather than worry too much about missing out on returns,
but old habits die slowly. Interestingly, one of the reasons
offered for the optimism seen in the stock markets
(particularly in the West) is that inventories have been so
dramatically worked down that they would have to be built
up. The inventory- to-sales ratio for US manufacturers,
however, is still quite high. In fact, sales have fallen faster
than inventories, so there is less room for inventory buildup
than many think. Over time, yes, the buildup can and will
occur -- but it won’t be anytime soon.
We are likely to see a recovery in some of these areas from
the bottoms reached at the end of 2008 and the beginning
of this year. But please examine the fundamentals: in
America, real estate prices continue to fall, millions of
homes are underwater, with the value of mortgages
exceeding the market price, and unemployment is increasing,
with hundreds of thousands reaching the end of their thirty
nine weeks of unemployment insurance. States are being
forced to lay off workers as tax revenues plummet.
The banking system has just been tested to see if it is
adequately capitalised in a stress-free “stress” test. Even with
reasonable levels of stress removed from the analysis, many
major institutions failed. Disappointingly, rather than
welcoming the opportunity to recapitalise, perhaps with
government help, banks seem to prefer a Japanese-style
response: we will muddle through. In fact, the healthier ones
can’t wait to return the government funding so that they can
revert to their preferred levels of over-compensation for
mediocrity.
“Zombie” banks -- dead but still operating among the living
- roamed the Japanese landscape for over a decade and
Japan’s long-term recession is directly linked to their dismal
inability to grease the wheels of industry. Banks prefer to
use improper accounting (they were allowed, for example, to
keep impaired assets on their books without writing them
down, on the fiction that they might be held to maturity and
somehow turn healthy). Worse still, they are being allowed to
borrow cheaply from the United States Federal Reserve, on
the basis of poor collateral, and simultaneously to take risky
positions.
Some of the banks did report earnings in the first quarter of
this year, although significant profits were predicated on a
most amusing accounting trick. The banks were able to book
billions of dollars of profits on the logic that they had issued
bonds which had dropped sharply in price due to the bank’s
weakened credit standing, using the twisted logic that the
banks could buy back their crappy paper at lower prices.
This sort of financial activity won’t get the economy going
again quickly.
The American government, too, is betting on muddling
through, trying to buy time to avoid calamity. The Fed’s
measures and government guarantees mean that banks have
access to low-cost funds, and lending rates are high. If
nothing really horrible happens - losses on mortgages,
commercial real estate, business loans, and credit cards - the
banks will make significant profits the old fashioned way (i.e.
by earning a positive spread on their loans) and they just
might avert another crisis - for a while. In a few years time,
the banks will be recapitalised, and the economy will return
to normal. This is the happy scenario.
But experiences around the world suggest that this outlook
is largely unrealistic. Even if banks were healthy, the
deleveraging process and the associated loss of wealth
means that, more likely than not, the economy will be weak.
Consumption in the US will remain low, and consumption
elsewhere is unlikely to pick up the slack. China, which has
the potential to boost domestic consumption and spending,
needs to re-direct its fiscal spending programs in order to
head in this direction. At the end, the demand for bank
services will be muted. Moreover, the weakened position of
bank balance sheets and even when there is demand, heavily
restrictive underwriting rules means that loans will not be
easily forthcoming.
These problems are not limited to the US. Other countries
(like Spain) have their own real estate crises. Eastern Europe
has its challenges, which are likely to impact western
Europe’s highly leveraged banks. In a globalised world, a
chink in one part of the system quickly reverberates
elsewhere. In earlier crises, as in east Asia a decade ago,
recovery was quick, because the affected countries could
export their way to renewed prosperity. But this is a
synchronous global downturn. America and Europe can’t
export their way out of their doldrums.
Every downturn comes to an end. The question is how long
and deep this downturn will be. In spite of some spring
shoots, we need to be very careful to consider the overall
growing conditions and not bank on a robust economic
harvest anytime soon.
13

VTB Capital to Establish a Presence in Dubai
Moscow headquartered VTB Capital, the investment
business of VTB Group (one of the largest financial groups
in Russia), is planning to set up operations in Dubai. VTB
Capital has recently secured a license from the Dubai
Financial Services Authority (DFSA) to operate as an
Authorised Firm in the Dubai International Financial Centre
(DIFC). The company already has a banking presence in
London and a branch in Singapore and views Dubai as a
stepping stone for its global expansion strategy. According
to Yuri Soloviev, President and Global CEO of VTB
Capital, ‘’Asia, the Middle East and Africa are strategic
markets in terms of VTB Capital’s business development.
The region contains a number of very appealing countries
both from the capital and investment perspective.’’ The
Dubai operation will be VTB Capital’s entry point for the
Middle East and Africa, where it plans to promote its
investment banking services including arranging and
advising on securities, derivatives and other financial
products.
Government to be the Largest Banker in
Venezuela
In addition to the government ownership of Banfoandes,
Banco Industrial, Banco Agrícola and Banco del Tesoro, the
Hugo Chavez administration has announced plans to
purchase Banco de Venezuela from Grupo Santander. This
takeover will make the Venezuelan government the most
powerful player in the financial system and will add more
than 15,000 employees to its payroll. Data from the
14
NEWS
Global
Update
A quick review of industry news from
around the world.
Venezuelan Superintendence of Banks indicates that
financial institutions run by the state have a delinquency rate
that is above average and tend to suffer significant losses (as
seen in the case of Banco Industrial) and might therefore
increase the burden on the tax payer.
Bahrain’s Sovereign Wealth Fund to Tap Islamic
Debt Market
Bahrain’s $10 billion sovereign wealth fund, Mumtalakat, is
reported to be searching for international real estate bargains
and may tap the Islamic debt market, including sukuk and
syndicated loans, to finance parts of a commercial
development around the Bahrain International Circuit. It is
believed that Mumtalakat is planning to move away from
private equity into other asset classes such as real estate. A
large part of the funds are expected to be invested in
international markets but at the same time it does not plan
to divest its holdings in local firms in the near future,
possibly due to low market valuations. Mumtalakat, which
has the reputation of being the most transparent Gulf
Sovereign Fund, has already invested in Gulf Air, McLaren
and National Bank of Bahrain.
Bank Central Asia to Launch Shariah Bank
Following its acquisition of a small bank last year, the third-
largest lender in Indonesia, Bank Central Asia, will be
launching a Shariah bank in September. BCA, which has a
market capitalisation of almost $8 billion, acquired Bank
UIB in October last year and has planned to convert it into
a Shariah bank. This is part of its effort to tap into a growing
 NEWS
Islamic banking segment, especially in the micro, small and
medium enterprise segment. According to Bank Indonesia
data, the country currently has 5 Shariah banks and 26
commercial banks with Shariah units.
Shanghai to be Centre of Insurance Innovation
China’s insurance regulator, CIRC, plans to convert the
eastern metropolis of Shanghai into a centre for insurance
innovation and technology research and development.
“Shanghai has the right infrastructure, an experienced pool
of insurance professionals, highly globalised insurance
institutions and a well-regulated insurance market to set up
an insurance innovation and technology R&D centre,” says
Wu Dingfu, Chairman, CIRC. Shanghai is home to 37
insurance companies, which is almost one third of the total
number of insurers in China. Five of the nine insurance
asset management companies in China are also based in
Shanghai.
New Re-Insurers Enter India
The finalisation of re-insurance rates in India by regular
players such as General Insurance Company (GIC), Munich
Re and Swiss Re has resulted in the entry of a group of new
re-insurers into the country in the recent past. These include
Asia Capital Re, Slovenian Re, Best Re, Malaysia Re and
Kuwait Re. In a shift from trends this year, regular re-
insurers refused to offer re-insurance covers following large
discounts required by insurance companies. With exposures
growing and premium reducing, re-insurers were unwilling
to hike the commissions payable to insurers. On an average,
reinsurance rates grew by 5-10 per cent during the recently
concluded renewals season.
Five International Banks Gain Approval for
Local Incorporation in Vietnam
In the recent past, five international banks have gained
approval from the State Bank of Vietnam to convert their
branch presence into wholly owned, locally incorporated
entities. The first bank to complete the incorporation
process has been HSBC with Standard Chartered Bank,
ANZ Bank, Shinhan Bank of South Korea and Hong Leong
Bank of Malaysia expected to follow shortly.
United India Insurance Mulls International
Foray
Indian public sector non-life insurer United India Insurance
Company has announced plans to launch overseas
operations soon. The insurer is in the process of appointing
a consultant to recommend new market entry strategy. Of
the four government-owned general insurers, New India
Assurance has the biggest international presence in
countries like United Kingdom, Netherlands, Nigeria and
Kenya. Oriental Insurance has a presence in Dubai, Kuwait
and Nepal, whereas National Insurance has a presence in
Nepal. United’s market share last fiscal increased to 13.98
per cent from 13.33 per cent the previous year.
OECD Drives Co-operation to Help Combat Tax
Evasion
Following initiatives of the Organisation for Economic Co-
operation and Development (OECD), Switzerland,
Luxembourg, Hong Kong and Liechtenstein have consented
to follow international standards on sharing bank data and
improving transparency mechanisms to aid the global effort
to combat tax evasion. It is believed that Switzerland holds
$2 trillion of all wealth held abroad and the recent move to
cooperate has been hailed by the international banking
community.
New Takaful Programme Launched by Dubai
Islamic Bank
Dubai Islamic Bank has launched the Al Islami Takaful
Programme, its Shariah-compliant savings plan with takaful
benefits, which is designed to meet the needs of customers
looking for Islamic financial planning solutions. This has
been developed specifically for the needs of the bank’s
existing customers by FWU - a leader in takaful expertise,
with Dubai Islamic Insurance & Reinsurance Co (Aman) as
the Wakeel. The programme combines savings and
investment plans with personal takaful protection.
According to Dr Adnan Chilwan, Chief of Retail and
Business Banking, DIB, “This programme gives customers
the flexibility to switch between investment options at any
time, make partial withdrawals and early encashments or
even continue their investment plan after maturity. The
annual solidarity Takaful fund surpluses are distributed
among all participants, proportionate to their contribution.”
Moody’s Upgrades Chile
Moody’s Investors Service has recently raised its rating on
Chilean sovereign debt from A2 to A1 and has also
upgraded the foreign currency ratings of the country’s top
four banks. Chile is the first investment grade country to be
upgraded since the economic crisis started. It is believed to
have been saved from the brunt of the slowdown by the pre-
crisis high in copper prices, the profits from which were
incorporated into two special funds (which are now worth
$22 billion) and around $23 billion into international
reserves.
IMF Predicts US$ 4,100 Billion Write-down
According to the International Monetary Fund (IMF),
global write-downs on toxic assets by banks and other
financial institutions may reach US$ 4,100 billion. IMF, in its
Global Financial Stability Report, has stated that North
American institutions were only half way through the
process of cleansing their balance sheets and European
institutions lagged even further behind.
15

As a result of the oil boom during 2002-2008,
the GCC Region had generated significant
wealth exceeding $6trn, including about
$350bn controlled by nearly 50,000 GCC
women.
Other statistics show that the size of
investments managed by GCC
businesswomen is estimated at $38bn,
including nearly $16bn by Saudi women. In the
UAE, there are around 15,000 women
managing $4bn while nearly 1,300 women in
Qatar control $6bn.
16
ARTICLE
GCC Women’s
Savings: Can it
Boost the Region’s
Economy?
Dr Manahel Thabet
Founder, Al Salasa
There are some key factors that contributed to the
accumulation of this wealth and the expansion of women’s
role in investment and economic activities in the Gulf
Region. These include the oil and economic boom,
encouragement of women to enter new business fields, and
the growing flexibility in economic and investment laws in
the region.
However, I believe that there are still a number of challenges
blocking Gulf women efforts to play a more active role in
the domestic economy and entering new business sectors,
especially in the small and medium enterprises. These
include the lack of incentives, as well as lack of financing by
banks, other financial institutions and funds.
Another major challenge is the lack of sufficient incubators
that provide financial support and training for new
businesswomen or those seeking to set up a venture. There
is also the social factor, with many investment opportunities
not reaching women because they are circulated or discussed
among men, which women are not privy to. So, the business
opportunities reaching are only those that have already been
rejected by men!
I also feel that women require more independence,
incentives for their projects, and flexibility in procedures to
set up their own businesses and make a bigger impact on the
economy.
Some women have proposed that they have access to
investment in products and tools that are specially tailored
for them, but thought it is unfair to present some products
 ARTICLE

and tools only for women because they want to break out of the traditional
female investment sectors and embark on contemporary ventures.

Although GCC women aspire investing in new business areas, they lack
sufficient investment information to break out of the traditional female
investment spheres such as gold, deposits and properties, which limits their
success and curtails their activity in the region.

I urge women to become proactive and make the move. Sticking to certain
traditional investment fields will create setbacks such as assets’ decline or gold
price downturn; moreover, it will limit their success.

Women may be on the edge of the Gulf ’s financial world but their savings
could provide a major boost for the region’s flagging economy, especially as a
significant portion of their savings is in cash, land and jewellery. It is truly
surprising to see such vast potential remain untouched. The social standing of
women in the GCC has improved, but there is still a long way to go, I believe.
In most of the GCC countries, men take care of women’s money, and in some
cases women do not know anything about their portfolios’ status until it is too
late. Though a lot of women have cash, they don’t know how to invest it.

Many young women have revolted against male domination over women’s
wealth and have started occupying high positions in banks to manage women’s
money. For instance, until 2003, women in Kuwait Stock Exchange could only
make deals by making a telephone call to the broker. Now, they have a separate
room with female brokers and real-time information. Having said that,
however, the playing field has not completely leveled out; female traders are still
a fraction in the trading community and in some GCC countries women do not
have the full authority to execute deals (they still have to pass the deals on to
the men to finalize them).

Dr Manahel Thabet is the only

The hitherto untouched women’s wealth woman in the Gulf listed as a
can generate large profits for women as trader in the international
bourse dealing with stock and
well as the GCC economy. bonds on Nasdaq, Nikkei, Dow
Jones and FTSE 100, and
managing portfolios in offshore
Western countries have recognized the increasing role of women in the Arabian financial centres such as the
Gulf states, even as the region is witnessing radical changes in social Cayman Islands, Switzerland
composition, and this development is reflected in many areas of employment,
especially in the financial sectors and investment in the government sector and and Panama.
the area of consulting, engineering, medicine and information technology.
Dr Thabet has founded Al
I have personally witnessed that Gulf women occupying senior positions in Salasa, a general trading
various sectors, both in government agencies and private sector institutions, company established in Dubai,
have demonstrated exceptional performance and represent a great source of
inspiration for other women.
which diversifies into managing
portfolios, consultancy, joint
The future of the hitherto untouched women’s wealth can generate large ventures and creating new
profits for women as well as the GCC economy if utilized correctly. Through business opportunities for
financial education that energizes, empowers and enables women to lead
effective roles in the financial world, we can ensure GCC women’s participation
those who are looking to invest
in enhancing the global financial situation. either in the GCC, Yemen or
worldwide.
17

Financial Planning
Agile FT signs partnership with Figlo and SRE Financial
Planners to Provide Financial Planning Software Agile FT
has begun its entry into the emerging field of financial
planning by partnering with Figlo, the Dutch market leader
in financial planning software and SRE Financial Planners, a
well-known financial planning company that also runs a
financial planning academy.
With this new partnership, Agile FT adds niche financial
planning software and consultancy to its existing
comprehensive portfolio of solutions.
Figlo is the market leader in the Netherlands financial
industry and has pioneered the use of Microsoft’s Surface
Table computing for financial planning. Microsoft recently
showcased the Figlo Surface software in the ACORD
conference in Orlando as well as in Greece, Germany and
Russia.
Agile FT and Figlo have formed an exclusive consortium to
market this solution in the Middle East, Africa and South
Asia. In India, SRE FP is also a part of this consortium.
The Financial Planning platform, aptly called Hawanedo
(Have-Want-Need-Do in action), helps banks, asset
management companies and insurance companies to
graphically analyse the financial requirements of their clients
and then recommend the right products to them. The
solution is available on both, traditional platform as well as
on Microsoft Surface, an intuitive, touch screen table that
18
PARTNERSHIPS
Partnership
Announcements
New partnerships enable entry into
Financial Planning and MicroFinance
enables Financial Advisors to interactively work with their
clients.
With leading financial institutions looking at gaining a
competitive edge using Surface Table to leverage the first-
mover advantage, there has been a huge response to the
asset management offering from Agile FT and the addition
of this intuitive financial planning platform is set to take the
market by storm.
On the occasion of the signing ceremony, Kalpesh Desai,
CEO, Agile FT, said, “We are very excited to partner with
Figlo to offer a futuristic platform to the market that will
create a paradigm shift in how financial planners can service
their clients. Hawanedo promises to change the way we look
at our personal finances and financial planning, providing an
intuitive and easy to use interface on the web, and even on
surface tables where financial planners could sit across the
table with their clients and enable the advisory process
intuitively and interactively. We are also pleased to partner
with Sykes and Ray Equities (SRE) who will enable the
knowledge platform and will be our knowledge partners to
enable financial planners use the software in India.”
Jenze Bosma, CEO, Figlo, who is already getting accustomed
to the Indian way of life commented, “This combination
will make real changes in India in terms of how clients
understand their financial situation and future.”
“With Agile FT and SRE, we are confident that we have
found the perfect combination to serve the financial
industry, both from a financial planning knowledge
 PARTNERSHIPS
perspective as well as from an IT point of
view,” added Albert van den Broek, Figlo’s
Chief Globalisation Officer.
Yogesh Gupta of SRE Financial Planners,
given his experience in financial planning
shares his outlook, “SRE Financial Planners,
being the pioneers in providing financial
planning services in India, are glad to tie-up as
knowledge partners with Figlo and Agile FT to
bring revolutionary financial planning software
to the fast-growing financial services industry
in India. It is very important to move from
product selling to need-based product
recommendations and we believe that this kind
of software helps financial planners deliver
greater value to their clients.”
About Figlo
www.figlo.com
Figlo, a 14-year old Dutch market leader in
financial planning software, serves banks,
insurance companies, other financial
institutions and independent financial advisors.
It offers new ways of calculating and
communicating personal financial information
and solutions by offering a whole new range of
software products for the financial industry
worldwide.
About SRE Financial Planners
www.srefp.in
SRE Financial Planners, a division of Sykes &
Ray Equities, was established to offer an
entirely customer need-driven platform for
delivering Financial Planning services
professionally and ethically. Through its desk
of dedicated, experienced and highly skilled
Certified Financial Planners (CFP Certificants),
it is spearheading the Financial Planning
movement in India by providing unbiased,
client need-based advice. SRE Financial
Planners is dedicated to help and advice its
clients achieve their life goals through proper
management of their personal finances.
Further it is disseminating knowledge and
training to budding Financial Planners through
its education division called Financial Planning
Academy.
MicroFinance
Agile FT concludes agreement to acquire solution for MicroFinance
from Chennai-based Theme Technologies.
Agile FT has announced the conclusion of an agreement with
Theme Technologies, Chennai, that would enable Agile FT to
acquire Theme’s MicroFinance, MicroCredit and Credit
Management product stack, Themepro Universal MicroFinance
Solution, in an earn-out mechanism over three years. Themepro
UMFS is compliant with CGAP standards.
The products will be rebranded and launched as AGILIS Universal
Microfinance Solution and will enable Agile FT offer it both as a
software platform and as an outsourced service to MicroFinance
institutions in emerging markets.
The immediate thrust will be in South Asia, Anglophone and
Francophone Africa, Middle Eastern markets like Saudi Arabia and
Egypt and South East Asian markets including Indonesia, Malaysia,
Philippines and Vietnam.
AGILIS UMFS is an all encompassing solution that enables MF
institutions rapidly reach the under-banked rural populace using
mobile and smart card technology.
It includes a comprehensive loan and savings product definition
engine, channel interfaces, data repository enabling centralised
data processing and management of remotely captured
transactions in the field. A compelling feature is an integrated micro-
credit scoring and rating engine based on socio-economic factors.
Kalpesh Desai, CEO, Agile FT, said, “With the addition of Theme’s
products in our stack, we intend to service the MicroFinance sector
by offering our software as well as our platform as a service. From
a modest beginning on a pilot basis in 1992, the microfinance
industry in India has now touched the lives of more than 50 million
people. The need of the hour is to enable delivery of services such
as credit, pensions and insurance to this community quickly and
efficiently, which is possible only through cost effective yet scalable
technology. Agile FT is proud to partner in India’s development and
progress by launching Agile UFMS and making a positive impact on
the lives of millions of people who can benefit through our
technology.”
With Africa being an important market for Agile FT, Desai said, “The
last twenty five years have seen tremendous improvement in
understanding and providing financial services to advance
development and eradicate poverty, including provision of financial
means to save, access credit, and start small businesses, and
finally enhance community development. Agile FT’s solutions will
enable MicroFinance initiatives to scale up beyond the ‘micro level’
and become a sustainable part of economic empowerment.”
19

In the last decade, the asset management
industry has weathered many storms. Fortunes
have been made and dramatically lost all in a
matter of a few months.
With various players in the market both on the
buy and sell side, offerings have matured and
institutional as well as retail players have
burgeoned.
In this scenario of increased uncertainty,
investors are demanding more information,
transparency, detailed analysis and well
worked out strategies from their portfolio
managers.
Hence, in addition to complying with increasing
regulation, asset managers need to meet
unprecedented investor expectations and are
looking at technology to enable them do so.
20
SOLUTION SPOTLIGHT
Investment
Management
from Agile FT
Presenting iDEAL Funds
iDEAL Funds is a multi-currency, integrated asset
management solution designed to automate the complete
investment management operations of an investment bank
or an asset management company. iDEAL Funds manages
and controls all asset classes ranging from Equity, Fixed
Income (including Sukuks), Money Market, Derivatives, Real
estate, Alternative Investments among others. It automates
the complete process right from pre-deal analytics, order
management, deal capture, position management, valuation,
bank account management, reconciliation, accounting to
NAV generation. The software is intuitive, interactive and
provides real-time information.
The solution also has a powerful risk management module
for maintaining limits and tracking exposure for regulatory
and internal compliance. It is designed to monitor and
administer all portfolios on investment allocation rules as
per regulatory as well internal investment guidelines. iDEAL
Funds allows the asset managers to innovate, scale up
operations and deliver superior performance through the
robust, flexible and powerful tools available.
Platform Enabled Outsourcing
Platform enabled outsourcing services is emerging as the
definitive model for many banks as they strive to lower
operational costs to ensure a high return on investment.
Agile FT provides its services around its functionality rich
application software platform that is used for fulfillment and
dissemination. Platform enabled outsourcing is likely to
experience tremendous uptake in the coming months,
especially in the wake of the current credit crisis. Financial
 SOLUTION SPOTLIGHT
institutions should take advantage of the benefits that can
be sought from this model in order to stay ahead of the
competition and drive innovation.
Using its knowledge and business process outsourcing
capabilities, Agile FT helps clients define projects, align
them to organisational goals and builds flexible and scalable
systems and processes to deliver services at an optimum
cost. The key features of iDeal Funds include:
Pre-Deal Analytics
Sophisticated analytical tools are available for fund managers
to perform Simulation and Security-level analysis (duration,
convexity and yield to put/call) at the touch of a button.
These analytics equip the users with powerful information
even before the deal takes place (that is at the Pre-Deal
stage). The manager can thus take informed decisions.
Simulation enables the users to view the impact of their
proposed trades on each of their portfolios, the underlying
limits and predicted performance vis-à-vis a benchmark or a
model portfolio.
Risk Management
Powerful Risk Management engine ensures compliance as
per regulatory guidelines, internal investment policies (at
organization as well as portfolio level), risk parameters,
investors’ risk appetite among various other considerations.
In case of Islamic investment, adherence to Shariah
principles is provided for. The limit checks are configured as
online or offline, hard or soft based on user requirements.
Built in security alerts warn fund managers, risk managers
and other users in advance in case of any event that is
beyond set parameters.
Dealing
The solution has built-in flexibility to cater to specific
workflows of an organization for instance where an order
mandate can originate from a fund manager’s desk and flow
direct to the dealing room or where a chief dealer may want
a single-step order processing or where complete STP with
the broker may be desired. iDEAL Funds has been
successfully working in all such scenarios.
Post Deal
All Post Deal functions such as Corporate Actions,
Valuation, Banking, Settlement, Accounting and NAV
calculation is taken care of in the system. iDEAL Funds is
intuitively built to cater to various types of asset classes in
multiple currencies. The system is able to offer calculations
in both WAC as well as in the First in First Out [FIFO]
method. It also provides for accurate accrual calculations on
both a fixed and floating basis. Another key feature of the
system is the ability to define portfolio level policy for
straight line and constant yield. The software is capable of
comparing the positions as they exist with the fund’s
custodian and reporting any exceptions.
Asset Valuation
Portfolio managers need to track and measure various
important metrics for a wide range of funds under
management. iDEAL Funds simplifies portfolio valuation
using sound portfolio wise policies. The software uses
multiple valuation methods for internal and regulatory
compliance. Built into the system is also a performance
monitoring module that has performance indicators and
compliance mechanisms for management of assets. The
software performs factsheet and attribution analysis as well
as evaluates risk parameters on the entire portfolio or
individual scrips using industry standard practices including
Beta, Sharpe’s Ratio and Treynor’s Ratio.
Interfacing with Third Party Systems
iDEAL Funds has a robust integration engine which has the
capability of interfacing with third party systems and
comparing feeds with the master data resident in the system.
The third party systems include Custodian system from
leading banks including Citibank, Deutsche Bank and
HSBC; Core Banking solutions or Central General Ledger
[GL]/ERP Systems; Equity Trade Interfaces and Market
Price Feeds from Bloomberg and Reuters.
Managing Banking and Accounting Transactions
The banking and accounting module helps the fund
managers to track appropriation, payments and receipts and
provide a comprehensive and reconciled view of the
accounts. The accounting engine can also be configured to
generate vouchers and accounting statements as required by
the customers.
Most important in this process is a feature where straight-
through-processing of files is possible for confirmation of
automatic trades and reconciliations. Deal reporting to the
custodian and fund accountant is also system generated. The
system also has the ability to generate a periodic cashflow
report as well as projections which is vital for the liquidity of
the fund management process.
Administering Users
iDEAL Funds allows for easy administration of users
through a centralised console. Every user has a secure login
id to the system and access to the system is defined based on
his/her function, role and status in the organisation.
Generating MIS Reports
iDEAL Funds has the ability to intuitively generate a variety
of reports that are required by different executives in the
management from time-to-time.
21

Almoayed (www.almoayedgroup.com)
Almoayed Group was established in 1982 in
Bahrain by Mr. Nabeel Almoayed with the
vision of becoming a truly global technology
and telecommunications solutions provider,
committed to best value services and solutions.
Almoayed Group also has operations in Qatar,
Pakistan, UAE, India and Kenya.
The company strongly believes in providing
better products, efficient solutions and support
to its customers. Over the years, it has
nurtured and developed reputed clients across
different industries, including banking, financial
services and insurance.
22
PARTNER SPOTLIGHT
Building
Bridges in
Bahrain
A profile of Almoayed Group, Agile FT’s
business partner in Bahrain
As a leading technology company in Bahrain, Almoayed
Group helps its clients innovate, automate and deploy
business processes at an optimum investment coupled with
very high quality. With a dynamic pool of resources at its
disposal, the group has the ability to implement complex
technology solutions.
The main essence of the group’s approach is the willingness
and ability to understand the customer’s business before
proposing or creating a solution. This customer centric
approach, coupled with strong industry domain knowledge,
sets the group apart from the rest of the pack, and has
enabled them to become one of the largest and highly
credible technology suppliers in Bahrain.
Almoayed Group has spent many years building and
maintaining close business relationships with its partners to
offer clients with best-of-breed solutions for their business.
The group has leveraged its partners’ products to configure,
install and service third party solutions for enterprise-level
clients across various vertical markets and geographies.
The company has an impressive list of customers, including
National Bank of Bahrain, Arab Banking Corporation,
Ministry of Finance, Bank of Bahrain and Kuwait, United
Gulf Bank and Grindlays Bank.
Almoayed Group has a strong focus on quality, and is
dedicated to continuous process improvement to ensure that
customer expectations are met.
 www.agile-ft.com

Agile Financial Technologies Pvt Ltd Agile Financial Technologies Agile Financial Technologies Pte Ltd
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Fax: +971-4-435-5709

Views expressed in this publication do not necessarily represent the views of Agile FT and the information contained herein is only a brief synopsis of the issues discussed herein. Agile FT makes
no representation as regards the accuracy and completeness of the information contained herein and the same should not be construed as legal, business or technology advice. Agile FT, the authors and
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