Tips to Secure Mobile Banking Services

The use of mobile phones nowadays is not limited to making calls and texting. People use their phones to check e-mails, browse the Internet, and to carry out banking functions like account transactions, balance checking, account activity (withdrawals, deposits, etc.) alerts, changing PINs, just to name a few. Mobile banking is growing exponentially, and with sensitive financial information available at the touch of a finger, safety is the topmost concern for customers and banks to avoid any fraudulent activity. Here’s how you can secure your mobile banking services to keep all your financial data from harm.

Security Tips for Mobile Banking

Use Authentic Banking Software
Make sure you install authentic software on your mobile phones, and ensure it is from a trusted and approved source. Most of the banking software for mobile phones is developed by third-party firms, so before you download anything, confirm with the bank for the authenticity and the latest version.

Password Protection
Protect your mobile with a password, and set the maximum number of incorrect passwords a user tries to enter to three. After three unsuccessful attempts, the mobile should automatically wipe out all the data that is stored on it for security reasons. Choose passwords that are composed of alphanumeric and special characters, and those which others cannot guess. Do not use date of birth, SSN, or any names as passwords. Change your password once a month.

PIN Protection
Change the personal identification number (PIN) or access code provided by the bank at the first attempt. Use a combination of numbers that is difficult to guess for anyone, and does not include SSN or date of birth. Change the PIN regularly and do not repeat the same PIN. Banks usually take precautions in this case and do not allow users to reuse PINs

Are Insurance Settlements Taxable?

Fact about insurance settlements

Insurance settlements and claims are always subject to certain conditions and exceptions. Generally, when one is provided an insurance settlement, it is not taxable.

However, it may be subject to taxation based on the type of insurance and certain other circumstances. You should also know when this needs to be reported and when it need not, while filing for taxes. The paragraphs below will explain these terms and conditions in detail.

Auto Insurance

It is generally not taxable.
The payment received on theft or damage to your car is not subject to taxation.
This is especially true if your car is being replaced. However, if you subtract the cost of the car and report it, you will be taxed on the extra benefit you have received.
This is because the value of your car has already depreciated, and the insurance payout is considered as extra gain. Thus, if it is more than the amount of tax deducted, your insurance will be taxable.

Life Insurance

This is not taxable.
However, it could be subject to taxation, and this depends a great deal on the amount held by the policy as well as the residence of the deceased.
If the policy was completely owned by the individual himself, it would have been taxable if the amount would have been above USD 5.25 million (as of 2013).
If the beneficiaries held the policy, the policy is not taxable until a minimum amount.
Also, the amount that is taxable varies from one state to another.

Health Insurance

Depending on certain circumstances, a health settlement is taxable.
One such situation is when the employer sponsors the insurance for his employee and his family.
This is taxable under the federal law, and the worker must pay tax to his employee on the costs that

Actual Cash Value Vs. Replacement Cost

Comparison between actual cash value and replacement cost

If you have an insurance policy for your property/asset, you may have come across the financial terms actual cash value and replacement cost. Mostly these terms are used in commercial insurance―insurance of property /fixed assets of any entity, and they are used for valuation purposes. However, if you aren’t too familiar, let us explain.

Simply put, Actual Cash Value = Replacement Cost – Depreciation.

While this equation may have made understanding the terms a little easier, yet some explanation will be required. Let us highlight the difference between these financial terms, with an example to explain what is their impact on your indemnification.

Actual Cash Value
Replacement Cost


◾ It is the value of a property which you will receive if you sell the property. In other words, it is the replacement cost, reduced by depreciation of that asset.
◾ It is the cost which is required to be paid, to replace the existing asset with another comparable asset of similar quality.

Insurance Coverage

◾ In case of an insurance policy which pays you the actual cash value if your property gets damaged, they (insurer) will pay an amount equal to replacing your asset; however, after factoring in the age of your asset and reducing the value on a pre-determined pro-rata basis.
◾ If you opt for this insurance policy, at the time of damage or loss to the asset, the insurance company will pay you an amount required to replace the asset at the prevailing market conditions, regardless of the age of your asset.

Insurance Premium

◾ The insurance premium in this case is lower than a replacement cost insurance.
◾ The insurance premium, in this case, is definitely higher than the other one since depreciation is not taken into account.

Example for Comparison

Calculation of

Pros and Cons of Mobile Banking

According to a new database released by the World Bank in April this year, nearly 2.5 billion people, almost one half of the adult population around the world, don’t have any formal access to our complex financial system, let alone, its simplest format – the banking system. This leaves a major fraction of the poor population dependent on private money lenders, who charge very high interest rates contributing to the vicious cycle of exploitation and poverty. Moreover, financial exclusion of a major part of the world population has also occurred because of several other reasons that include, poor bank infrastructure, long travel distance to banks and the amount of paperwork required to open a bank account. These glaring issues have been now realized by financial institutions. The central banks of almost all developing countries are pushing reforms on a mammoth scale to bank the unbanked poor and in this massive endeavor, technology is turning out to be their greatest hope.

The most famous among all the measures adopted to bank nearly half of the unbanked adult population is mobile banking. The surge of optimism surrounding this latest technology that has the immense potential to alleviate billions of people from poverty, has been fueled by the exponential increase in the number of mobile subscribers all across the globe, with developing economies like India and China, leading the way. To just give you a perspective, Cisco’s recently published “Visual Networking Index (VNI) Global Mobile Data Traffic Forecast Update” stated that by the end of 2012, the number of mobile devices in the world will exceed the World’s population! If all goes well, it may be possible for mobile banking to transform the world’s financial landscape and redefine the relations of banks and its consumers, not only in

The Concept of Adverse Selection Explained

Concept of adverse selection with example

In 2001, George A. Akerlof was awarded a Nobel Prize for analysis of markets with asymmetric information (shared with other two winners). He is famous for his article ‘The Market for “Lemons”: Quality Uncertainty and the Market Mechanism’ (1970), that talks about adverse selection in the market of used cars.
When we buy something new from the market, often, we are slightly skeptical of the seller. Why is it so? We are worried that the seller might know something which we do not know. Thus, you’re scared that asymmetric information might seep in. It is only after a good experience that we instill confidence in the seller. However, if you make a wrong selection due to concealment by the seller, you might be a victim of adverse selection. Also known as anti-selection, it is very common in the insurance sector.
Note: Asymmetric information is a situation wherein, one of the parties to the transaction has more knowledge regarding the transaction than the other. He may exploit this information for his advantage.
Definition of adverse selection in economics: It is nothing but the potential loss that can be incurred by the buyer or the seller due to asymmetric information in the market. The following are a few examples that will explain this concept further.
Examples of Adverse Selection
Adverse Selection in Insurance
Adverse Selection in Insurance
► This case occurs when the insurer conceals a vital parameter in the insurance, that puts the insurer at loss. Thus, the insurance premium is lesser, since the insurer has not factored the risk while calculating the risk potential, due to asymmetric information. As such, the insurance will be less profitable for the insurer, since he is not aware of a critical information that

Types of Insurance Fraud

Common types of insurance fraud

The insurance business is affected by fraud that costs millions of dollars every year. It’s a crime that not only affects insurance companies, but also translates to higher costs of premiums for the common man, as insurance companies increase the cost of premium to make up for the losses incurred as a result of fraud.

Frauds are prevalent in every sector of the industry. Hence, it is our responsibility to report anything that we find suspicious, as our doing so can successfully foil the plan of someone attempting to dupe the company.

In this Buzzle article, we shall take a look at some of the most common types of fraud that insurance companies have to be aware of.
Different Types of Insurance Fraud
Automobile Insurance
Car insurance policy
Automobile insurance fraud is perhaps the most common. The fact that auto insurance is compulsory these days has led to a rise in the probability of auto insurance fraud. Some of the most common types of automobile fraud include those listed below.
Report of False Theft
This is a common type of fraud in the automobile insurance sector. The culprits report that a car is stolen, when in reality, it is not. So, what do they do with the car? Well, they either dismantle the car at an automobile repair shop, or sell the car overseas after removing the license plate. This way, it becomes impossible for the authorities to trace the existence of the car, and the culprits get the money.
Report of False Accident
It is interesting to note that not all accidents are genuine, and some of them are deliberately executed for the sake of insurance money. The driver of both the colliding vehicles are usually the only people involved in

Investing in Gold or Platinum: Which is Better?

Comparison between gold and platinum

Gold has been an all-time favorite of commodity investors, and platinum has been closely following up. However, investors have not opened up their portfolios to platinum, the way they have managed to invest in gold.

Platinum is stated to be the most rarest metal among all precious metals. Hence, whether it is bullion, coins or jewelry, the prices of platinum, most of the time, are above premium. Also, the limited supply of platinum makes it an expensive investment commodity. Gold, on the other hand, is relatively affordable and can act as a strong inflation hedge which platinum cannot. So, in order to know precisely if it is good to invest in gold or platinum, check out the following key differences, and you will know what is the right thing to do.

Inflation and Currency Issues
It tends to increase in price during inflation and currency issues. It does not react favorably to inflation and currency issues.
It is not as rare as platinum. Platinum is almost 30 times rarer than gold as 10 tons of ore are used to produce 1 ounce of platinum.
Gold is available in varying degrees of purity. Post alloying, platinum is 90 to 95% pure.
It is not as dense as platinum. It has a higher density.
Gold enjoys better liquidity than platinum. It may not be easy to find buyers and sellers for platinum.
Gold does not face such problems, and the supply and demand remains steady. Owing to less profit, labor intensive industry, and high operating expenses, many mining companies are planning to cut down the production. This limited supply means the prices will rise.
Investment Purpose
It serves as a hedge against economic uncertainties and inflation for

5 Revenue Recognition Methods

Revenue recognition methods

Revenue recognition policy means the timing at which the income of any organization is recorded in the books of accounts. The revenue recognition policy of any entity may differ as per their business, their accepted accounting policies, nature of complexity of business, nature of transaction, etc. It is not easy to zero in on any fixed revenue recognition policy, and it must adhere to the accounting standards prescribed by the nation, not to mention some practical difficulties which might crop up, and pose a difficulty, for its implementation. Management must consider the peculiarities of the business before deciding on any recognition policy, and of course, seek expert help if required. With the growth of the service industry, revenue recognition has become more of a complex affair. However, revenue recognition has significance not only for appropriate representation of income, but also to compute the tax liabilities to be accounted and paid for. Of course, applying an inappropriate method will indicate misleading profits.

Typically, books of accounts have two methods of accounting―cash system and accrual system of accounting. Cash system of accounting does not record transactions until and unless cash is actually paid or received. On the other hand, accrual system of accounting records transactions regardless of whether cash is received or spent. It implies that even receivables and payable are recorded. It gives a better picture of the financial position of any organization. Here are the five types of revenue recognition methods in brief.

Sales basis method
The most commonly used method of revenue recognition, it prescribes revenue to be recognized at the time when the ownership rights of the goods or services have been transferred to the buyer. It implies that the entity follows the accrual system of accounting.

Cost Recovery Method
As the name