To those who feel guilty that they are not managing their personal finances in a disciplined way, the good news is that they may well belong to the majority. And, more importantly, the blame may often lie in the absence of tools for managing finances, rather than disinclination to be thorough with one’s incomes and expenses, feels V. R. Govindarajan, Director, Perfios Software Solutions Pvt Ltd, Bangalore (http://bit.ly/F4TPerfios).
“As of today, spreadsheets seem to be the only technique used by majority of people to track their finances. Obviously, this is error-prone, manual, and painstaking. So, it becomes imperative that we leverage technology to the extent possible so that tracking finances does not become a major chore, but a quick and habitual activity,” he says, during a recent interaction with Business Line.
Technology-based tools, Govindarajan expects, can save significant amount of time and thus encourage lot more people to manage their finances in a better way, leading to more savings and less expenses. Our conversation continues over the email.
Excerpts from the interview.
What are the top 4 or 5 critical issues that you had to address when designing the personal finance solution?
1) Privacy: A typical user of a personal finance solution is interested in knowing how privacy is handled in the solution. No one wants a third-party to know about his/her finance details! So, privacy is a key design centre.
While adding any feature, it is necessary, therefore, to ensure that we do not require any personal information from the user to support the feature. For instance, in our personal finance product, all we require for a user to use the solution is a valid email ID. No one has any way of identifying a user of the system. Also, the solution is continuously certified the privacy policies by well-known third-party service provider Trust Guard (www.trust-guard.com).
2) Security: On par with privacy, security is another top concern of every user. So, every feature in the solution has to ensure that security is not compromised at any stage. We have designed an innovative security system (patent-pending) that ensures that no user credential is available with Perfios or the data centre. Also, our system is a read-only system and hence no one can do any transaction with the system. This again, provides additional comfort to the user. The data stored on our server are completely encrypted and that also provides additional security to the users. Of course, we use industry standard ‘https’ protocol for our communication (using industry leader VeriSign certificate). Our security policies are constantly reviewed and certified by third-party service providers such as Paladion (www.paladion.net).
3) Usability: The solution is meant for average end users who may not be tech-savvy. So, the solution should take usability aspects into consideration and should provide intuitive user behaviour and experience. Not only the user interface, but all touch-points with the user (online help, support desk, FAQs and any other interactions) should be simple enough that even a non-tech-savvy person should be able to relate to and use the solution.
4) Performance: While every web application addresses this aspect, we had focus on this specifically taking into account the Indian infrastructure and the environment. For example, as the solution caters to end users from different locations, we cannot assume that people will have the best connectivity. So, the solution should be designed in such a way that end users get reasonable performance even with lower speed bandwidth/ connection.
5) Scalability: This is a key requirement for any web-based application. User base being large, there is a need to handle large concurrent load as well as constantly increasing user base. The product has to be designed in such a way that it should be possible to add servers to handle the increased load without bringing down the system. Related to this requirement is the ‘availability’ requirement – as the solution is used by users in different geographical locations, the system has to be made available all the time (or as close to ‘all the time’).
It should be noted that the performance and scalability requirements are not unique to a personal finance solution and are relevant for any large scale web application.
Would you like to talk about the role of analytics in personal finance, considering that many users may not be tech-savvy?
Analytics become relevant once you have the base data. As mentioned earlier, because of the lack of tools, people do not keep track of their finances and hence there are no data available to perform the next level analytics. Thus, technology-based tools not only enable people to keep track of their finances, but also let them perform various analytics which help them in spending less and saving more.
While it is possible to perform the following typical analytics/ queries even manually, a technology tool can make the exercise extremely simple and also extensible (to other scenarios):
* Did you know you spent 100 per cent more on fuel this month compared to the average fuel-spend for last 6 months?
* Did you know that you are keeping on an average a sum of Rs 3.50 lakh across 4 savings bank accounts earning only 3.5 per cent interest of (Rs…)? Instead, if you had deployed this amount in a typical FD (yielding 7 per cent) or a liquid fund (xyz), you could have earned Rs… more during the last 6 months.
In addition, a web-based solution can analyse one’s investment-return and expenses comparing with similar profiled people.
Your take on the relevance of certification for IT products.
While certification may not guarantee everything, it normalises the playing field and ensures that a product meets at least the basic entry level criteria. More than in other areas, certification becomes very critical in a space such as personal finance.
As the solution deals with very private information, the solution should be certified for various privacy and security policies so that users can start using the solution without any fear of their data getting misused. And of course, the certification cannot be one time – the policies have to be constantly monitored and reviewed so that any change in these sensitive policies are immediately flagged.
Can you describe the innards of your personal finance solution from a technical perspective?
The solution has been designed to work over the web and offered in a SaaS (Software as a Service) model. As a typical consumer is very mobile today and would like to track the finances from wherever he or she is (and over different devices and locations), we decided to offer the solution only in a SaaS mode and not offer a desktop version.
The solution is structured like a typical 3-tier web application, designed for high scalability and performance. We use the proven LAMP stack (Linux, Apache, Tomcat and MySQL) for our middle tier and the database layer, and Flex for the client side.
The entire solution is hosted in a highly secure data centre. The solution has been architected in such a way that we can expand our server and database farms dynamically to handle the increased load – thus, we can scale gracefully, without degrading the performance.
Any other points of interest.
Mobile solutions (solutions offered through mobile phones) become very interesting for the personal finance space (and in general for a typical B2C application). Here again, the advantage of offering the solution over the web is that the solution and (the underlying data) are accessible from anywhere at any time.
In a country like India, where there is a far better penetration of mobile phones than PCs, offering mobile solutions increases the adoption rate. Also, even from a pure social behaviour perspective, offering a solution with all its great features over the mobile can make the solution more ‘inclusive,’ bringing lot more people (who may not have great bandwidth and other infrastructure to go through the traditional Internet route) to leverage the power of technology and thus enabling them to streamline their finances by exploiting the technology-based tools.