Reasons to Go Cashless and Ditch Paper Money

More and more people are leaving their cash in the bank and using their credit or debit cards for everything. In other words, paper forms of currency are out and digital payments are in. But, are cashless transactions feasible and practical? The answer is definitely yes. Here are a few reasons why going cashless is a great idea.

Convenience: You can shop, dine out, gas up and pay for your Uber with one small, lightweight card. Consumers and businesses all benefit from the speed and convenience of electronic and digital payments.

Security: Carrying cash makes you susceptible to robbery and cash is 100% gone and untraceable. If you carry a debit card it is replaceable and any fraudulent activity is refundable. So, transitioning to cashless payment options enhances security and reduces risk. Utilizing cards keeps your money secured.

The use of EMV chip technology assures your account information is protected and your hard earned money is safe from unauthorized use. And, if for some reason your cards are lost or stole you can always have them blocked and replaced.

Going Cashless creates a disciplined spender: Paying with cards gives you a record of all your transaction, allowing you to monitor your spending. Using a debit card can also prevent debt because you are only spending what you have in your bank account.

You Always Have Exact Change: How many times have you paid cash for an item that costs $5.02 with $6 and get.98 cents back. Now all you hear is that jingling in your pocket. If you had used a card, you wouldn’t have this very annoying problem.

Accumulate Rewards: Using cards can help you save money in different ways. For example, a cash back credit card will give you rebates on all your purchases with no caps or minimums. What about a card that gives you rebates while feasting with your friends or shopping for clothes, shoes or misc. items online. Who doesn’t like rewards? Card companies are always finding different ways to reward their customers for using their cards, so why not reap the benefits!

Discounts: Many merchants (online and offline) offer discounts ranging between 2 – 20% for using a cashless form of payment.

Makes It Difficult To Borrow Money: With little or no cash in your pocket, it is very difficult to lend money to those people who probably conveniently forget that they even borrowed it.

Do You Know How Dirty Money Is? From a hygiene point of view, money is absolutely filthy. Do you know what nasty stuff can accumulate on a dollar bill after several years in circulation?

Buy Now Pay Later: The arrival of credit cards that allow you to pay after 50-55 days without any interest payment is something that cash doesn’t offer. This is a blessing for people that run down their bank account balances.

Lastly, It’s Green: Using cashless modes of payments helps in maintaining bills and records electronically which in turn saves paper and thus saves a lot of trees.

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Life Changing Investment Mistakes

Introduction

Investment is the method of generating profits with the money we save. Money is the most important thing in any individual’s life. Without money, no one can survive. Therefore we should start saving our money and start investing. Financial Planning is the first step to take. Financial Planning helps us to set us long term and short term goals and according to these goals we can create a plan and spend our money accordingly. If financial planning is not properly devised then we can make many mistakes which can affect our life tremendously. Some of the mistakes we make are discussed below.

“The First Wealth is Health”- Ralph Waldo Emerson

In today’s world, not buying a health insurance is the biggest mistake one can ever make. Due to pollution and unhealthy lifestyle, people are getting infected by so many diseases at the early stage of their life. Health is one of the most crucial and important factors in an individual’s life and it should not be ignored. There is a saying that “Health is Wealth” and people are so busy in earning for their life, that they often ignore their wealth. Therefore, this crucial factor of life should be backed up by insurance.

Let’s take an example:

Mr. Stanley Rosario is a hard working serviceman who is working in a marketing company. One day on the way to his job, he met with an accident. He got so many injuries that he had to be hospitalized. His hospital fees amounted to be Rs 60,000 which is more than his one month salary. Now if he had done a proper financial planning and bought health insurance, he did not have to worry about the hospital fees.

Nowadays life taking diseases like Cancer are very common. The treatment of these diseases is very expensive. A common man cannot afford to pay for these diseases by himself. Health insurance plays a very important role in this case. Health insurance can cover the expenses of treatment of this disease.

Doing financial planning from the day you start earning is very important and buying a health insurance should be included in this financial planning.

Your Best Bet is having a Term Insurance

There are many families especially in India, where there is only one person who works and the whole family is dependent on that person. If that person dies, then what would happen to the financial requirements of the family?

“Most people don’t plan to fail, they fail to plan”- John L. Beckley

Therefore, the earning member should buy a term plan in order to secure the financial requirement of his/her family. A term plan is a kind of life insurance which provides coverage during a given period of time. If the person dies during that period then the amount insured will be given to the other member of his/her family. The term insurance plan is less expensive than the other life insurances. One should include buying a term plan in his financial planning.

Save Money and Money will Save You

The youth generation of India has this mindset of spending all the money they earn rather than saving it. They believe in this philosophy that whatever happens, they will see afterward, let us enjoy life now. They do not do financial planning. But this is the biggest mistake they make of not thinking about the future.

Many unforeseen events may occur in which huge sum of money will be required, then from where they will get the money? If we do not start saving today, then we will not able to maintain the standard of living. We also need money for emergency and to avoid taking loans in this situation. In today’s world saving is a must and if we are not saving then we are doing a mistake.

Too scared of diversification?

We live in a world where there are varieties of financial instruments available in which we can invest. People are fond of investing in Fixed Deposits and Public Provision Fund because the working of these instruments could be easily understood. But there are many other financial instruments are available which give us a higher rate of return than fixed deposit like equity, mutual funds, and Government securities. We should diversify our portfolio in order to gain more and also reduce risk.

Taking one step away from freedom

Debt is the amount of money that we borrow from other people when we are not able to meet our financial obligations. When we borrow debt then we also have to pay interest on it. There are many types of debts such as bank loans, mortgage loan, vehicle loan, student loans and so on. Companies take loans to run their business. Individuals take loan to fulfill their needs. We have seen that many times companies become bankrupt as they are not able to pay their debts.

“Borrowed money is the most common way that smart guys go broke”- Warren Buffet

On individuals, there is always the burden of paying interest and returning back the loan. There are many borrowers who try to attract individuals by introducing different type of schemes and individuals get stuck in these schemes. If we do financial planning properly then we will not be in the condition of taking so much debt. We will not be in the stress of paying back those debts and we will able to live a life financial secure if financial planning is done in the early stage of life.

Control your impulses, when you are broke

In this modern world, we get attracted to things that we do not need. We buy branded clothes, get attracted to gadgets, hang out with friends at expensive cafes etc. We compete with other people in society to show how well off we are. But instead of doing unnecessarily expenses we should start investing in financial instruments.

“Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.”- Johann Wolfgang von Goethe

There are many schemes such as low cost EMI, low interest rate credit cards, cheap loans etc in which get trapped. We should be cautious where we should spend our money. This should be also included in our financial planning. We should never over spend our money as it will lead to borrowing debt in future which further leads to stress. We should spend our money wisely. Therefore financial planning at an early stage is very important.

Bottomline

The wrong decisions taken in our life can affect us drastically. Therefore it is very important to start financial planning as soon as we start earning.No individual has the same set goals. So financial planning will differ from one person to the other. According to financial requirements, one must set their goals. If we do not have knowledge on investment products we can take help of the financial advisors. They help us in doing financial planning.

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Benefits of Credit Card Machines for Business

Other than credit card machines, technology has produced many notable effects, including the credit card machine. In the 21st century, people open themselves up to technology from the very center of their being. It has the added benefit of leading to an increase in the use of credit and debit cards. Additionally, the coronavirus’ arrival has also contributed to the increased use of contactless transactions. EMV cards are replacing magistrate premium cards. EMV chip cards give you the ability to make contactless payments. The merchants must have advanced payment terminals to accept such payments.

Credit and debit cards are used almost exclusively in today’s business world. To take your business to the next level, you must associate it with a credit card machine. The processing and payment services you need for online sales include a merchant processor that provides you with an online payment gateway. There will always be online modes that people will prefer to use, regardless of the volume of transactions. As a result, you have to use an advanced piece of equipment, such as a credit card machine, in tandem with your business.

Advantages:

Just because we’re living in the 21st century, it’s impossible to conceive of life without modern technology. A large number of businessmen prefer to stick to established business models. However, sometimes you have to alter your plans according to the current situation. This means that you need to be one step ahead of everyone else in the business. You will lose customers otherwise. An establishment that gets access to a credit card machine will enjoy countless benefits. Listed the benefits; so, don’t miss the following:

Obtain Legal Recognition for Your Company:

Accepting card payments using digital payment terminals is a legitimate business practice, so it should help your company a lot. The card brand name will be printed on the POS, and thus the customers will have no problem noticing it. This logo will be featured on the same online marketplace as well. The greater the number of customers from outside the country, the more money you’ll make.

Increase Your Profitability:

To accept various forms of payment, like credit cards, Google Pay, Apple Pay, and more, use a credit card machine at your business. Creating a positive impression on your customers is quite simple, but it also keeps your customers loyal. A credit card machine, thus granting flexibility in the ecosystem of online payment, provides customers with many payment options, thus allowing them to pay bills in various ways.

How to stay ahead of the competition:

Many businessmen have not yet fully embraced digital equipment, making small-business models in the early stages of transition. To accept online payments, your business equipment must be upgraded. If customers are no longer carrying cash, you can outpace your competitors. Research has shown that when customers use their cards to make a purchase, they spend more. Additionally, because you will make a substantial profit from accepting card payments, it’s highly recommended that you do so.

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Super Visa Insurance Monthly Pay North York

Note: SV is Super Visa

What is a Canadian Super Visa?

It is a Visa for parents or grandparents. It is a temporary resident permit that allows parents and grandparents to stay for up to 2 years in Canada per visit. Issued for parents and grandparents of citizens or permanent residents in Canada. It has validity for up to 10 years. A regular multiple-entry visa is also valid for up to 10 years, but only allows stays of up to 6 months per visit.

What is the processing time of a Super Visa?

The approximate processing time of a SV is short and takes almost 8 weeks. There are also specific requirements that one must meet before applying for a SV.

What Are The Mandatory Requirements To Apply for This Visa?

The govt of Canada has laid down some mandatory rules for parents and grandparents to apply for a SV. Those rules are,
1) Proof of their relationship with the child or grandchild who must be a Canadian citizen or a permanent resident.
2) A copy of the child’s or grandchild’s birth certificate.
3) A proof of medical examination document.
4) An official document naming the applicant as the parent.
5) A satisfactory evidence of a private medical insurance from a Canadian insurance company valid for one year from the date of entry.

Can The Parents Or Grandparents Work With A Super Visa?

No, the parents or grandparents are not permitted to work as their visa has the same restrictions as a visit visa holder.

What is a SV Insurance?

With the above information provided, now we know to whom a SV is issued and who apply for a SV. Not only the parents and grandparents require a SV, but also a medical insurance before entering Canada. The medical insurance should be no less than CAD $100,000 in coverage for health care, hospitalization and repatriation. This step is mandatory for the SV applicants.

SV applicants have to submit a proof of purchasing a medical insurance from a private insurance company.

There are a lot of medical insurance companies in Canada and North York has also got the best ones. People can go for SV insurance monthly pay North York. This facility of monthly pay gives a convenience of paying insurance charges monthly. This facility of monthly pay gives a convenience of paying insurance charges monthly.

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Setrega – A Global Analytical Regulatory Platform

Setrega is the Global Regulatory Analytical Platform which provides a comprehensive solution to the financial institutions for complying with one or more Regulatory Authorities. Through highly customizable and end-to-end automation, Setrega helps clients to configure Reporting Data, Reporting API, Connecting/Integrating Settings, Report Generation Requirements, Report Validation Requirements, Report Submission Mode and Feedback Management. As a Global Regulatory Analytical Platform, Setrega is designed to integrate with any financial services firms to receive regulatory data and process them to regulatory reports in specific formats with minimum customization effort.

Currently, all financial institutions are facing problems with dynamic changes in regulatory requirements, implementation risks associated with regulatory reporting and managing regulatory report error handling. All financial institutions are forced to adapt to these challenges and continuously seek for solutions which are cost-effective and accurate, with real-time feedback management. Sensiple’s Setrega fits into this emerging environment by supporting multiple Regulatory Authorities with an end-to-end automated solution.

Regulation Complied Preconfigured – ESMA – MIFIR/MiFID II, Monetary Authority of Singapore (MAS), Superintendencia Financiera de Colombia (SFC) etc.,
Significant benefits of the Global Regulatory Analytical Platform are,

Automation Capability

Financial Institutions gets the advantage of preparing and submitting regulatory reports without manual effort.

Comply with new Regulations without risk

Setrega provides flexible data source configuration, API mapping and reporting format changes with minimum customization in product level which ensures relief from regulatory and compliance risks for the financial institutions working in various regions.

Scalability

Depending on the Institutions type like Buy Side/ Sell Side/venues, Setrega is scalable in terms of increasing number of connections, the humongous volume of data, more number of reports and formats, increased number of submission modes and regulatory authorities.

Transparency

Handling a large volume of data gives challenges in managing data to auditing; Setrega makes it more accessible by allowing the clients to have full control over data by powerful data transparency method.

Dashboard

Setrega act as a one-stop shop for all regulatory reporting for financial institutions. A vastly informative dashboard in Setrega provides all historical, current and scheduled regulatory reports and its internal & external statuses in graphical and tabular representations.

Regional Coverage

Financial firms who run their business across the globe get benefited from Setrega as one solution solves all the regulatory and compliance needs. It is successfully verified with major regulatory frameworks like MiFID II and NFA (National Futures Association) and regulatory authorities like SEC and SFC.

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Handle Your Finances With Care

It takes years to gather a handsome amount of money, and if it is not handled properly, your most prized possession would soon escape from your hands like sand. This is the reason why people go for financial planning. It gives you a great sense of satisfaction when you know that your money is in safe hands and is being handled with utmost care.

However, not many people are aware of the process involved in financial planning. Based on your financial position, it is very important to go ahead with personal planning because if you don’t start planning well in advance, then you might face several challenges in the future.

Financial advisors suggest all individuals follow these six basic key principles for financial planning.

• Analyse your current financial status: To be able to plan for future you should first be very confident about your current financial position. Make a checklist of all the assets and liabilities and your income and expenditure. Having this information at hand, you would be in a clear position to understand how you can achieve your financial goals. Your total financial worth would help you to determine the ways to accomplish your set goals, which include paying for your children’s education, buying a new property or being ready for any financial emergency like the loss of a job.

• Chalk out your financial goals: In order to accumulate wealth, a lot of planning has to be done in order to achieve the desired goals. Setting goals would give you an urge to go ahead to achieve it. Your list of financial goals should be very specific, which would show that they are crystal clear in your mind.

• Plan for alternatives: You cannot expect your planning to go as per your wish, so you should always have a plan B at hand. After listing down your goals you plan for alternatives as well.

• Analyse the alternative options: You should ponder upon the feasibility of the alternative ways taking into account your social, personal and economic condition at present. The liquidity of your assets also matters in this regard.

• Creation and execution of your financial plan of action: Once you have planned about your alternative options and have analysed its feasibility, it is time for you to put these plans into action.

• Review your plan: Since financial planning is very dynamic process it is subject to change at any moment. So, it is always advisable to keep reviewing your plans every now and then.

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The Security Intelligence in The Financial Services

Security intelligence is the data related to safeguarding an organization from any outside and inside threats along with the processes, and policies developed to accumulate and evaluate the information.

It can also be referred to as the actual collection, standardization, and analysis of the data created by users, applications, and structures that influence the IT security and risk position of a business.

On a daily basis, information flows in organizations for the senior management to make smart decisions. The various stakeholders (employees, customers, contractors) are interfaced through various technologies.

However, the technological infrastructure can also result in serious security issues. The probable areas of intrusion are unlimited. Security experts and business leaders are trying to find an answer to the question – Is it feasible to have a robust security in an increasingly interfaced environment?

Though the answer is yes, it needs a radical transformation in processes and practices encompassing the financial services sector. The focus is not only on IT. Robust security facilitates a positive customer experience.

Cybercrime and Profitability

Financial institutions are at great risk since they are perceived to be an easy target for cybercriminals. According to a survey by IBM, “Financial markets, insurance, computer and professional services together account for over 40% of all security incidents worldwide.”

The losses, pertaining to cybercrime in other sectors could be due to industrial intelligence and fraud related to intellectual property, but in banking, online fraud is a possibility.

Any fraud related to the intellectual property and industrial intelligence could lead to reduced shareholder value, shut down of the business and net financial losses. These are the issues impacting the global financial sector, not only because the main reasons are not identified or the disruption to the customer is immediate, but also because they can result in a significant loss of money.

As per Andrew Haldane, Financial Stability Director at the Bank of England, “Cyber-risk has become a more pressing concern than economic depression and the Eurozone crisis, as it is a rapidly rising area of risk with potentially systemic implications”.

Comprehending the seriousness of the security risk is only a beginning. Financial institutions must establish an in-depth security intelligence strategy that would enable the financial institutions to have an insight into the perceived threats.

Financial institutions leverage top-notch analytics to get an understanding of:

The types of attacks that are occurring.
The probable source of the attacks.
The technology used by the cyber criminals.
Weak spots that could be exploited in the future.

Michael Davison, Banking and Financial Markets, IBM, stated,” There’s not another single issue that unites the interests of so many people at senior levels of banks. It unites technology, the CFO, security and compliance functions. But cybersecurity is also mission critical for people running lines of business and who are running P&Ls. So quite rightly it sits on the Board agenda. But there’s still work to do to educate Boards about the urgency of an effective response to the rapidly changing environment.”

Financial institutions must implement the following practices to get the balance between the required innovation and the related risk:

Establish a risk-conscious culture

An organizational transformation with an emphasis on zero tolerance towards a security failure must be established.
An initiative encompassing the organizational hierarchy to execute smart analytics and automated response competencies is needed to identify and resolve issues.

Safeguard the Working Environment

The functions in distinct devices must be examined by a centralized authority and the wide array of information in an institution must be categorized, tagged with its risk profile and circulated to the concerned personnel.

Security Design

The greatest problem with the IT systems and the unnecessary costs is from executing services initially and looking at security afterwards. Security has to be a part of the application from the first phase of design.

Ensure A Safe Environment

If the system is secure, security personnel can monitor every program that’s functioning; ensure it is ongoing and operating at optimal level.

Manage the Network

Organizations that route approved data through controlled entry points will be in a better position to identify and separate the malware.

Cloud Based Security

To prosper in a cloud scenario, organizations should possess the technology to operate in a secluded environment and track probable issues.

Involve Vendors

An organization’s security strategy must also involve its vendors and efforts must be made to establish the best practices among the vendors.

Financial firms have been a major target for malware attacks. Several aspects are impacting the financial sector. The direct connection between the breach of several personally identifiable information (PII) to the profitability has not been lost on the global financial stakeholders. This has led to the implementation of several global security projects.

A hazardous type of malware for online financial transactions is “Man-in-the-Browser” intrusions. It happens when a malicious program affects an internet browser. The program adjusts activities conducted by the user and in some instances, can initiate actions independently. It could lead to online stealing.

Financial institutions that can transform radically at a fundamental level, the way they function would be safeguarded.

The aim of enterprise security could initially emphasis on IT structures, it must be extended from the technology personnel & their systems to each individual within the organization, and all the stakeholders conducting business with it.

Financial firms must comprehend the data that they have, which must be made available to the system, where they can compare and develop a real understanding of the actual threats and contingencies that may compromise the business.

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Tips On How To Spend Your Windfall Income

As individuals, especially workers we sometimes get windfall incomes in forms of bonuses, profit shares, etc. However, a lot of the time the temptation is to spend the money on acquiring a new car, new clothes, shoes, new phones, among other things. While acquiring these things in themselves is not a bad idea, it is wiser to use windfall incomes for things that will have long term positive impart on our lives especially because we do not have a full grabs of what tomorrow will bring.

For workers just starting off or in mid level careers, it is really important not to squander windfall incomes on non-essentials.

Many years ago during the mid 2000s, when the banking and telecommunication really became big industries, many banks and telecommunication companies paid bonuses and profit shares to their staff on a yearly basis. Most new staff and mid level staff squandered their money on buying cars, renting new apartments in high brow areas and changing their wardrobes almost every 3 months. Nite clubs were packed every Friday night with each person almost trying to out do the other in terms money spent.

Today, the story is different. The global economy is almost comatose. Banks are no longer giving huge bonuses, neither are telecommunication companies doing any better. The oil industry is in shambles. Every industry is operating lean.

Windfall incomes will not come all the time as the economic realities have now shown us. So if you are fortunate to get a bonus or profit share that amounts to something reasonable, here are a few tips on how to spend wisely:

1) Invest in real estate: As much as this sounds like really over flogged, it is a wise counsel. A businessman once said, “the only Estate that is Real is Real Estate”. Real estate is big business. There is a huge demand for rental apartments especially mini flats and 2 bedroom flats. There are several real estate companies offering instalments payment options for those interested in buying land. You can invest your windfall income in buying a half plot or full plot of land. I will advice you buy from a real estate company rather than directly from the community especially if you do not have funds for immediate development.

The simple reason is that the real estate company usually would have sorted out community settlement issues with the land owners and so you can be rest assured that you land is at least secure from land grabbers. Also, by buying from a real estate company, you will benefit from quick capital appreciation of your investment and rapid development of the locations since there will be several people also buying and developing their property in that location. Another advantage of investing in real estate is that after developing the property, you can put it up for rent if you do not wish to reside in that location and use the rental income to pay for your rent in your desired location.

2) Invest in a part-time business: If you already have a business that you can run part- time alongside your full-time job, you should invest your windfall income in that business. You can buy the needed equipments or register for a training programme that will increase your expertise in that business area. If you do not already have business idea, you may want to consider doing some research to see what part-time business to invest in.

3) Invest in education: You can invest your windfall income in further education that will boost your profile and give you a better chance at a higher paying role in your industry or another industry entirely. You an also invest in the education of your loved ones like your spouse, children or siblings (if you have this responsibility thrust on you)

4) Invest in Marriage: Yes! you read me right.

This is for those who believe in marriage. If you have a partner and your really desire to spend the rest of your life with the person, then invest your windfall income towards settling down. You can start making down payments for some critical items on your list. Marriage is an investment in your lifetime happiness.

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7 Ways To Make Shipper-Carrier Relationships Better

Freight services are very important and load boards work great at connecting shippers with carriers. But the relationship between carrier and shippers ought to be good for the process to work out smoothly and be a win-win kind of a process. Fortunately, there are so many ways that can help improve the relationship between these two important people in the business. With stronger relationships, a reliable carrier network is maintained. By giving attention to carrier concerns, it is possible to build collaborative partnerships that are long lasting.

As a shipper, there are a few things that you can do to maintain a good relationship with your carrier.

1. Work for the good of everyone involved. This can be done by working with the carrier in determining which freights and lanes work the best. By working in conjunction with the carrier, then it is possible for profitability to be added to the network. It solidifies the relationship.

2. Honor commitment to the carriers. It is only when you honor your commitments to the carrier they will be able to honor theirs to you. Considering that carrier will usually base service price on data provided, then it is of importance that only accurate data should be provided. You should also ensure that you ship in tonnages and lanes that you say you will.

3. Be generous. This is in terms of the sharing opportunities that arise. When you bring new opportunities first to your carrier partner, then everybody will end up benefiting from an equitable agreement.

4. Start off with a plan. One of the best ways of avoiding a rocky start that could ruin an otherwise good relationship is to make sure that you start every new partnership with a plan. Allow a considerable amount of time for the carrier to get their system up and even train to take on new lanes and freights.

5. Avail all relevant data. The data that you provide during bidding process will largely determine how prepares the carrier is with regards to freight characteristics and location or even seasonal changes in terms of volume. It is therefore very important that you provide freight characteristic percentages and also monthly volume in addition to tonnage data and lane data that you give.

6. Keep communication lines open. Reviewing performance metrics, options and new services are always a good way of strengthening relationships. As a shipper consider holding regular meetings with carriers to discuss what matters most to the business. Using such meetings, you can come up with strategies to reduce costs and improve the business. Working together and communicating on a regular basis only solidifies the shipper-carrier relationship.

7. Embrace technology. In the same manner you expect real-time data on your shipments from your carriers you should make it equally easy for the carriers to transfer the data that you need. Choose programming options that offer them an accurate and smooth system of transferring the data that you need. There are so many technological tools that you can choose to make improvements to the business and relationship.

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A Quick Introduction To Behavioural Economics

The study of human behaviour, which has traditionally come under the umbrella of psychology, would seem to have little relationship with economics.

But, as we learn more about how the brain works through the dual disciplines of neuroscience and psychology, there is an increasing marriage with the field of economics, in order to better understand how people make financial decisions.

This has evolved considerably in recent years and is an emergent field that deserves a little introduction and explanation.

The traditional view of economics and financial decision-making

It is sometimes forgotten in economics that the field is meant to be about the behaviour of people when making financial decisions.

The traditional economist’s view is that the world is populated by unemotional, logical, decision makers, who always think rationally in drawing their conclusions. This view is underpinned by the understanding that human behaviour displays three key traits: unbounded rationality, unbounded willpower, and unbounded selfishness.

This has always flown in the face of the findings of cognitive and social psychologists, who questioned these assumptions as far back as the 1950s.

With the rise of behavioural neuroscience since the 1980s (especially Kahneman’s work) providing more insight into the workings of the brain, we are now more sure than ever about the role that emotion and bias plays in all decision-making: from simple day-to-day decisions like which dress to wear, through to larger decisions that may affect many people.

Overconfidence and optimism are two examples of behavioural traits that may lead to sub-optimal financial decision-making, and divert from the traditional model used. People have also been shown to make poor decisions, even when they know it’s not for the best, due to a lack of self-control.

So this is where behavioural economics has been able to step in and modify many of the beliefs of the traditional economic views.

What is behavioural economics – and how can it help?

Behavioral economics and behavioral finance study the effects of psychological, social, cognitive, and emotional factors on economic decisions.

This may apply to individuals or institutions, and involves looking at the consequences for market prices, dividends, and resource allocation.

Of the three traits of human behaviour included in the traditional model outlined above, unbounded rationality has received special focus, with new understandings in the field resulting from neuroscience.

Understanding better how people arrive at financial decisions can help in many areas: from personal finance to organisations shaping products and trying to get more customer sign-ups; and from the vagaries of stock market trading through to governments and how they formulate financial legislation.

Perhaps behavioural economics can, in future, help people to make better decisions to safeguard their financial futures; it may even have helped if more attention had been paid to it in the lead up to the Global Financial Crisis in 2008.

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