Why It’s About Time to Switch to Paying Your Bills Online

Simplify Online Bill Payments

While most people use mobile banking app/online accounts to pay their bills, they often get confused with the different options available. Do you need to pay through the billing company? Would it be better to pay through your bank? Can you use both options at the same time? Understand how to go about with online payments to know the advantages of each option and simplify the process.

How to do Online Bill Payment

Mobile and online bill payments come in two major types.

You can go straight to the website/app of the billing company, like for example, your cable company or insurance provider, then pay the bill there. As a rule, you can use your credit/debit cord or make an arrangement with your bank to debit it from your account. An advantage of paying on the billing company’s site is you know the exact amount to be paid. If you have several bills, though, it can be tiresome to log in to multiple sites every month.

The other option is to pay a bill through your bank. Almost all banks, financial institutions and credit unions provide this service. You just need to set things up using your mobile banking app/online account and, after a few seconds, you can make a bill payment. It is as simple as choosing the payee/s, keying the due amount, and selecting a delivery date. In case you do not want to pay bills by hand on a monthly basis, the majority of banks let you set up automatic recurring payments, so you can schedule your payments to avoid missing a bill payment whenever it is due. To streamline your payments, you just need to log in to the provided space and remember your password. In addition, it is easier to check your account balance.

The Advantages of Online Payments

Paying online using your mobile device is quick and easy, plus it allows you to schedule payments. Your payment dates can be synchronized with your paychecks/pay bills from various accounts. Most importantly, most banks and billing companies employ first-rate security features. For instance, Bank of America encrypts your personal details so they cannot be read during transit, and automatically signs off when your banking session is open but inactive for a long time. Besides security, you can reduce costs when using electronic payments, saving on cash and stamps.

Overall, electronic payments enable you to manage, monitor and review your payments, whether you pay via your bank or billing company. You can also search for specific bills that you paid. Whenever you pay multiple bills online using your bank or mobile banking app, you can view your payment history. Also, a lot of banks provide email notifications as a reminder of payments due.

Adverse Selection and Moral Hazard: Pondering Policy Implications of Asymmetric Information

How do firms mitigate adverse selection and moral hazard derivative of asymmetric information? How do hidden characteristics or profiles exacerbate adverse selection? How do hidden actions and material changes in behavior exacerbate moral hazard? The answers to these strategic questions are critical to effective formulation and execution of optimal adverse selection and moral hazard mitigation strategies that equate marginal costs to marginal benefits. Additionally, optimal mitigation strategy minimizes the known probability and incidence of decision failures with the attendant adverse effects and maximizes the profit producing capacity of the enterprise.

In this review, we examine some pertinent and extant academic literature on effective adverse selection and moral hazard optimal mitigation strategies. Each mitigation strategy has costs and benefits. Therefore, the objective function is to maximize the net benefit of mitigation strategies. In practice, the optimal risk mitigation strategy equates marginal costs to marginal benefits by minimizing the incidence of adverse effects derivative of decision failures and maximizing the profit producing capacity of the enterprise.

Adverse selection and moral hazard are terms used in risk management, managerial economic and policy sciences to characterize situations where one party to a market transaction is at a disadvantage due to asymmetric information. In market transactions, adverse selection occurs when there is a lack of symmetric information prior to agreements between sellers and buyers, while moral hazard occurs when there is asymmetric information between the two parties and material changes in behavior of one party after agreements have been concluded.

For example, adverse selection arises in any situation in which one party to a contract or negotiation, possesses material information relevant to the contract or negotiation that the other party lacks; this asymmetric material information leads the party lacking relevant and material information to make decisions that cause it to suffer adverse effects. Therefore, adverse selection occurs when one party makes decisions without all the relevant material information, which changes the risks allocation between the parties to the transactions.

When one party has access to better or material relevant information than the other party during a transaction, it is said that one has asymmetric information. Therefore, when a party has asymmetric information, they may make an adverse selection. Adverse selection arises when the actual risk is substantially higher than the risk known at the time the agreement was reached. One party suffers adverse effects by accepting terms or receiving prices that do not accurately reflect actual risk exposure. The consequences of asymmetric information may be exacerbated by bounded rationality and cognitive biases attendant to most competitive use of information. Conversely, moral hazard occurs when a party conceals or misrepresents material relevant information and changes behavior after the agreement is concluded and is shielded from the consequences of the risks emanating from material change in behavior.

Economic and policy sciences suggest the decision makers must not only know, but indeed, understand and anticipate consequences of asymmetric information to mitigate risks of adverse effects attendant to adverse selection and moral hazard. There are classic examples from academia and insurance industry.

Non-selective academic programs attract a disproportionate number of students whose previous academic background and profile make them higher risk for academic success, retention, graduation, and placement. Indeed, this is a classic case of adverse effects derivative of adverse selection and moral hazard.

For example, non-selective admission process combines recruitment and selection which results in adverse selection. And once admitted, refusal to attend classes, refusal to complete assignments, refusal to take notes in classes, critical listening, disruptive and inattentive conduct in classes are instances of post-enrollment moral hazard that make non-selective students a higher risk for retention, graduation and placement. Please note, it is not the change in behavior per se that causes moral hazard in this instance. It is the discounted consequences from changed behavior that gives rise to moral hazard.

There is gathering evidence that some of these non-selective academic programs are increasingly willing to accept higher risks derivative of adverse selection and moral hazard because their operating budget is enrollment driven. Therefore, in the short-run enrollment is a more pressing need than retention, graduation and placement rates. The focus on enrollment is necessary but short-sighted and misguided because in practice, these benchmarks and indices are interrelated, circular and cumulative.

In the insurance industry, insured healthy females in child bearing age and healthy middle-aged females who subsequently seek creative ways to get pregnant present adverse selection and moral hazard problems. Further, insurance applicants whose actual risks are substantially higher than the risks known by the insurance company are potentially interesting case studies. The insurance company suffers adverse effects by offering coverage at premiums that do not accurately reflect its actual risks exposure.

Risks Mitigation Strategies and Some Practical Guidance

Please consult with competent professional for specific advice. The following are general guidelines based on review of extant academic literature, cumulative professional practice and best industry practices. In sum, adverse selection and moral hazard derivative of asymmetric information expose parties to transactions to undue amounts of higher risks for which they are not adequately and appropriately compensated. Therefore, it is essential for parties to take all the steps possible to mitigate risks of adverse effects derivative of asymmetric information and the attendant decision failures.

Managerial economic principles and best industry practices suggest screening and sorting to mitigate adverse selection, and incentive contracts to mitigate moral hazard. Additionally, strategic intelligence systems (SIS) that provide relevant, accurate and timely identification and quantification of risk factors is strongly recommended.

In risk management, the use of aggregate limits of liability and policy riders that proscribe post-contract material unilateral actions, and caps aggregate financial risks to parties is strongly recommended. Further, dispositive disclosure, discovery, monitoring, random inspection, and verification are highly recommended.

Finally, because adverse selection derives from hidden characteristics and profiles and moral hazard derives from hidden actions, the decision systems and strategic intelligence systems must be transparent and provide relevant, accurate and timely information to facilitate decisions based on known probability of risks incidence and allocation between the parties to the transactions with due and appropriate compensation.

Prof. James Gaius Ibe, is the Chairman/Principal-At Large, of the Global Group, LLC-Political Economists and Financial Engineering Consultants; and a tenured professor of Economics, Finance and Marketing Management at some of the local universities.

Businesses That Can Receive Financing From European Funds

If you decided to start your own business with European funds, you can consider yourself lucky. European funding is offered for many types of business, as long as they start from inspired ideas and have the potential to become profitable, bringing benefits to the society.

Here are some business ideas that can qualify for European funds.

Health gets European funds

The Health is a generous field for opening different activities that benefit both the investors and the society. If you work as a dentist, you can open a dental office with funds from the European Union. The same can be done if you work in other medical specialties. Through European funds you can purchase the necessary equipment for your cabinet. Try to open the office in an area where the services you want to offer are absolutely necessary.

Cultivation of mushrooms or aromatic plants

It may seem like an unusual business idea with European funds, but growing mushrooms or plants cultivation can be successful. The agricultural businesses are among the ones that have benefited from European funds and have been profitable.

It will be easy for you to get contracts to sell your plants not only in the country, but also abroad, if you follow the European Union standards

Solar energy – a star among businesses with European funds

Protecting the environment and producing green energy have become a priority for many of us. With such a business idea you cannot fail in accessing funds from the European Union now and next years. It is a future business idea that responses to the concerns of the people worried about the planet’s future.

Photo-video and virtual reality

Do you dream of having a film studio or are you passionate about virtual reality games? The European Commission offers funds for both activities. All the necessary equipment can be purchased with the money obtained from funds.

Catering services

We all need to eat but few people have time to cook. You can help them with a catering company, financed with funds. Whether you opt for traditional foods or internationally inspired dishes, people will be happy to eat healthy and tasty.

Odas Global Consulting can turn your idea into a successful business

When you have a good business idea, but you don’t know what to do with it, Odas Global Consulting can help you. This business consulting company in accessing European funds managed to get financing for 281 projects, which turned into beautiful businesses.

The same thing can happen with your project. More than 20 Odas consultants have business experience and are always informed about everything that is new. Therefore, they are able to offer the best business advice.

As a result, you will receive the best consultancy services, with a guarantee of professionalism and respect to your needs and requirements. Because it receives a proper business consultancy, your project has all the chances to access the funds. In addition, Odas also helps you with the project implementation, as it offers complete consulting services.