This would be a longish thread about different things happening in and around me, some things a reality check, while others having much more potential.
First of all wekosystem can be done today. I saw a site which shows an application framework.
http://eng.silvercab.biz/ If one looks at this site although its a demo site, this tells that it can be done, for if people can order cabs then putting up few financial transactions should be much much easier. Btw the site is done using Drupal . I do not know the people behind it but they seem to have done a good job of the same.
More interestingly, I remembered the same as last week I had attended the Moneylife workshop which was organized by Ms. Sucheta Dalal www.suchetadalal.com . I have been an admirer of her work for maybe 3-4 years. The workshop/seminar was on the theme of Credit Reports . There were 4 panelists :-
Mr.PS Jayakumar,Country Business Manager,Citibank (www.citibank.com) , Mr.Arun Thukral,Credit Information Bureau of India Ltd. (www.cibil.com), Dr.Sujata Prasad,General Manager,RBI (www.rbi.org.in) ,Ms.Sureka Marandi,Banking Ombudsman . (www.bankingombudsman.rbi.org.in)
Now the problem stems from the fact how the loan is given, what terms there are, the conditions and charges made by banks for various services, all of them well-disguised to fool the customer or so it seems.
The other part of the equation is CIBIL. From their own site http://www.cibil.com/overviewin.htm
“Rapid industrialisation. An expanding economy. Growing aspirations. Increased incomes. Improved lifestyles. Availability of high quality products and services. An expanding market.
These factors have created an atmosphere conducive to rapid credit off take. While the demand for credit has risen exponentially, there has been a parallel increase in competition, and credit delinquencies. In such an environment, risk assessment is of critical importance. Not only, in deciding on what business to book and the speed at which a credit grantor does so, but also in determining the appropriate pricing.
Comprehensive credit information, which provides details pertaining to credit facilities already availed of by a borrower as well as his payment track record, has become the need of the hour.”
Now the problem is they are not going to be the only ones, they are going to be 3 more credit organizations. Now with CIBIL, as and when it will become possible for individuals, one would have to pay Rs. 100/- for his/her credit report (at today’s rate). Even if we take a conservative estimate its going to be Rs. 400/- this way or that way. Even if we go from our bank its bound to be charged in one way or the other.
Also there are issues with accuracy of the database, how recent the history and things like that.
For people who feel they have been wronged or wrongly charged, they have the RBI and the Banking Ombudsman but from whatever interactions there were it seemed that they have just no voice.
Its only lone voices like Sucheta who’s able to take up cases, get some action going on them by reporting in mainstream media or consumer groups who may take up the cause one way or the other. The other side of the table seems to have lost touch. The people who were wronged or who felt they were mis-guided in the audience were educated, the elite of the society. If they felt like this, I shudder what other may be going on a day-to-day basis.
On this sombre note, I bid adieu for now, with the hope there is someway a wekosystem comes up in this industry and shows people what is possible.
The wekosystem tries to solve the basic problem of bringing transparency to business affairs. While there are many more things and many aspects today I would like to open it for debate from just one perspective, transparency in Accounting methods.
Let’s talk about transparency first in either our public institutions as well as private Institutions. If we look at the data that either public institutions or private institutions put up to show accountability is minimal at the best. Its not just that, I have seen institutions/companies who have floated equity and there is quite a good amount of public holding in their companies and they do not send their AGM’s notices to some specific individuals/shareholders because these people study the public accounts very diligently and then ask some uncomfortable questions in the AGM.
If one also looks at the number of Political and Corporate financial as well as Accounting scandals such as the Watergate or Enron as well as Forbes list of Corporate Scandals one sees that scandals have become more and more common in today’s world then ever before.
What these number of scandals did was give a bad name to Corporates and businesses all over.Also the legislation which happens or happened as an after-thought has raised cost of business for everybody concerned. So is there a way out?
Wikipedia shows a glimpse of the way ahead. Wikipedia has an annual fundraising thing and they submit their financial reports every year. Not just that they also put up expected expenses for the number of projects and things they are doing. (Budget) While this is good but we feel this is not enough. The only way for businesses going forward is to put their business/their accounts in real-time.
This idea, this understanding of putting accounts on-line could not have borne say even 5 years back. Why? for the simple reason the technology was not available then. Whether its web applications, Web Server or bandwidth all of these were either in short supply or not mature enough for the idea to be conceivable. If one looks at a transaction in any business and however big or number of transactions there may be they couldn’t possibly overtake the millions of transactions done for millions of passengers who fly to number of destinations worldwide. So technologically speaking, this is possible today. While Wikiocean, a company I work with hopes to be the first in introducing this technology, it might be you. The idea, the tools are all there it just needs some integration and it will be there.
I believe this would happen, sooner rather than later. And once there is something to show as in live data, I believe many businesses specifically charities, Trusts, NGO’s, enlightened businesses would move in that space.
While this is just one aspect of the wekosystem its interesting in its own right, wouldn’t you say. Comments, suggestions are all welcome 🙂