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According to a Websense survey, reputation risk and potential loss of customers emerged as two major concerns amongst IT decision-makers if a data breach was to occur
Security services provider Websense Inc said that nearly all respondents (about 98%) from its data security survey conducted in India have said that they are under pressure to ensure protection against data loss.
"The survey findings clearly suggest that data security is among the top issues for information technology (IT) management and confidentiality of data is critical despite tough economic conditions and increased compliance issues," said Surendra Singh, regional director, SAARC and India, Websense.
The survey was conducted amongst 50 chief information officers, chief risk officers and IT managers at the ‘e-Crime India Congress’ at Mumbai, to gauge the impact of data loss on organisations, its causes and readiness of organisations to stop security breaches.
According to the survey, reputation risk and potential loss of customers emerged as two major concerns amongst IT decision-makers if a data breach was to occur. Around 89% of respondents said that it may lead to loss of customers while 82% said that it will result in loss of reputation while 31% of the respondents said that it may have negative impact on the share price of the company.
Responding to accidental data leakage, 63% of respondents believed that most data breaches happen as a result of unintentional or accidental data leaks while 48% of respondents felt that companies are not prioritising security due to cost-cutting measures. About 68% of respondents said that data breaches happen when employees take confidential data with them when leaving the company.
The survey said around 89% of respondents were of the view that the amendments made to the Information Technology Act 2000 (the IT Act) were a step in the right direction for tackling data security issues.
"With the changes in the IT Act to protect confidential data and the necessity to reduce the risk of losing customers or damaging corporate reputation, organisations should look to step up their plans in building safeguards against possible data breaches," said Mr Singh.
After SEBI cracking down on entry loads and upfront commissions, IFAs are thinking of charging MF investors a fee; however, a few market watchers feel that investors are not ready to shell out money yet
Mutual fund (MF) distributors across India are finding new ways to remain in the business. They are now thinking of charging their clients for investing in MFs.
“I have kept my clients informed about what is happening in the industry. The 0.50% commission paid by the asset management company (AMC) will not continue for a long time. AMCs are bleeding. I charge 2% from my clients. We are able to charge only our existing customers who know our quality of services. It’s difficult to charge a new customer,” said Thiru Murugan, CEO, Wealth Creation & Management Services.
“I know a typical case where a person who went to deposit Rs10 lakh was sold ten different ULIPs (unit-linked insurance plans) for the entire family. Next year he received a notice that he has to pay Rs10 lakh as renewal. The Securities and Exchange Board of India (SEBI) says that it is protecting investors, but I don’t know who will regulate banks,” adds Mr Murugan.
But there are others who feel that if the fund does not perform well, then investors will rush to their office to demand a return of the fee.
“Customers only pay to banks and big institutions. Clients invest Rs5,000 initially after taking advice and then invest Rs1 lakh directly. If an MF doesn’t gives good returns then clients will come and ask me to pay back the fees,” said a certified financial planner (CFA).
A distributor gets Rs6 as commission for a client investing Rs500 per month in a systematic investment plan (SIP) for one year (a total investment of Rs6,000). Distributors are finding it unviable to continue providing service to such clients. There are talks among the IFA community of charging a uniform rate. IFAs are planning to come up with a rate card enumerating various charges.
However, this uniform fee model would not be relevant across India for all distributors. The charges are likely to differ from one distributor to another depending on the advisory. As of now, distributors are thinking of charging anywhere from 1% to 2% of the total investment from their clients. SEBI had earlier mandated that the upfront commission to distributors shall be paid by the investor to the distributor directly.
Stock markets have rallied for the past five consecutive quarters. How will the markets perform in the coming quarter? Moneylife’s study of similar historical patterns points to a 100% negative trend
The thirty-share BSE Sensex has been on a roll for the past five quarters. Although the Sensex ended the March quarter only marginally higher than the December closing, it now means that the Sensex has been surging for the past five straight quarters. Will this momentum continue or will the markets take a breather?
Moneylife did a study of the past performance of the Sensex when the index had reported similar growth for a span of five straight quarters. We found to our surprise that the outcome for the subsequent quarter—after the rally in the previous five quarters—was the same throughout.
We looked at Sensex data from 29 January 1979 up to the last week. We found that during this period, there have only been five instances of a sustained rally in the Sensex for five straight quarters. What happened in the 6th quarter in these cases? In all instances, the subsequent quarter has reported a substantial decline in the index level. That is an astounding 100% negative outcome. On an average, the Sensex has dropped by 13% on such occasions (not including the current quarter).
So does this mean that the Sensex will be unable to sustain its solid show in the coming quarter?
Regular readers of Moneylife would be aware of a similar study of the past performance of the Sensex when the index had witnessed a rally for weeks on end. The study accurately predicted the continuation of the index rally in its sixth and seventh week.
We also pointed out, based on this data, that the chances for an encore in the eighth week did not appear so robust. We had advised readers to exercise caution as chances of a reversal were getting stronger and that the markets may take a breather after this prolonged rally.
Surely enough, the eighth week saw the index snapping its seven-week rally, with a drop of 0.5% over the previous week. This definitely lends some support to the contention that the Sensex is likely to end up closing lower in this quarter compared to the March quarter.