1. What is Securitisation? Discuss its Role and Process?

INTRODUCTION
Securitisation is the financial practice of pooling various types of contractual debt such as
residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other
non-debt assets which generate receivables) and selling their related cash flows to third party
investors as securities, which may be described as bonds, pass-through securities, or
collateralized debt obligations (CDOs). Investors are repaid from the principal and interest cash
flows collected from the underlying debt and redistributed through the capital structure of the
new financing.

DEFINITION of 'Securitization'
The process through which an issuer creates a financial instrument by combining other financial
assets and then marketing different tiers of the repackaged instruments to investors. The process
can encompass any type of financial asset and promotes liquidity in the marketplace.

Role of Securitisation
Securitisation: changing role of banking systems
Banks are increasingly facing the threat of disintermediation. In a world of securitized assets,
banks have diminished roles. The distinction between traditional bank lending and securitized
lending clarifies this situation. Traditional bank lending has four functions: originating, funding,
servicing, and monitoring. Originating means making the loan, funding implies that the loan is
held on the balance sheet. Servicing means collecting the payments of interest and principal, and
monitoring refers to conducting periodic surveillance to ensure that the borrower has maintained
the financial ability to service the loan. Securitized lending introduces the possibility of selling
assets on a bigger scale and eliminating the need for funding and monitoring. The securitized
lending function has only three steps: originate, sell, and service. This change from a fourstep process to a three-step function has been described as the fragmentation or separation
of traditional lending.

Conclusion
Securitization is a valuable tool which helps the company to roll the flow of Money in the
Market efficiently, legally.

Capital markets role in securitisation:

The capital markets have provided the needed impetus to disintermediation market.
Professional and publicly available rating of borrowers has eliminated the informational
advantage of financial intermediaries. Let us imagine a market without rating agencies any
investor has to take an exposure security has to appraise the entity. Therefore, only those who are
able to employ analytical skills will be able to survive. However, the availability of
professionally conducted ratings has enabled small investors to rely on the rating company's
professional judgement and invest directly in the security .instruments rather than to go
through intermediaries. But this should not be construed as no role
for banker

Process of Securitisation
Mechanics of securitisation Securitisation involves a true sale of the underlying assets from the
balance sheet of the originator. This is why a separate legal entity, the SPV, is created to act as
the issuer of the notes. The assets being securitised are sold onto the balance sheet of the SPV.
The process involves: undertaking due diligence on the quality and future prospects of the
assets; setting up the SPV and then effecting the transfer of assets to it; underwriting of
loans for credit quality and servicing; determining the structure of the notes, including how
many tranches are to be issued, in accordance to originator and investor requirements; the
notes being rated by one or more credit rating agencies; placing of notes in the capital
markets.

The Basic Process

Who are the parties to the deal?

The mechanism of securitisation normally involves four parties Originator, Investor, Special
Purpose Vehicle (SPV) and the Seller.
Originator: The entity or organisation, which securitises its assets, is called as an originator of
the transaction.
Investor: The persons (individual or a company) who invests the money to purchase the
securities are called the investors.
Special purpose vehicle (SPV): It is an intermediary, which holds the receivables on behalf of
the investors. Generally as the number of investors keeps growing and their base may keep
changing from time to time, it is essential to have an intermediary to secure the interest of
investors.

Seller: He is the person who sells the receivables to the purchaser without expense, cumbersome
formalities or without the consent of the debtors.

2. Enumerate the Major Points of Difference between CRM and E-CRM

Customer relationship management (CRM) is a system for managing a company's
interactions with current and future customers. It often involves using technology to organize,
automate, and synchronize sales, marketing, customer service, and technical support.
The eCRM or electronic customer relationship management encompasses all the
CRM functions with the use of the net environment i.e., intranet, extranet and internet.
Electronic CRM concerns all forms of managing relationships with customers making use
of information technology (IT).

Major differences between CRM and eCRM

1. Customer contacts

CRM Contact with customer made through the retail store, phone, and fax.

eCRM All of the traditional methods are used in addition to Internet, email, wireless,
and PDA technologies.

2. System interface

CRM Implements the use of ERP systems, emphasis is on the back-end.

eCRM Geared more toward front end, which interacts with the back-end through use of
ERP systems, data warehouses, and data marts.

3. System overhead (client computers)

CRM The client must download various applications to view the web-enabled
applications. They would have to be rewritten for different platform.

eCRM Does not have these requirements because the client uses the browser.

4. Customization and personalization of information

CRM Views differ based on the audience, and personalized views are not available.
Individual personalization requires program changes.

eCRM Personalized individual views based on purchase history and preferences.

Individual has ability to customize view.

5. System focus

CRM System (created for internal use) designed based on job function and products.
Web applications designed for a single department or business unit.

eCRM System (created for external use) designed based on customer needs. Web
application designed for enterprise-wide use.

6. System maintenance and modification

CRM More time involved in implementation and maintenance is more expensive

because the system exists at different locations and on various servers.

eCRM Reduction in time and cost. Implementation and maintenance can take place at
one location and on one server.

Operational CRM.
Operational CRM provides support to "front office" business processes, e.g. to sales, marketing
and service staff. Interactions with customers are generally stored in customers' contact histories,
and staff can retrieve customer information as necessary.
The contact history provides staff members with immediate access to important information on
the customer (products owned, prior support calls etc.), eliminating the need to individually
obtain this information directly from the customer. Consequently, many call centers use some
form of CRM software.

Operational CRM processes customer data for a variety of purposes:

'Managing Campaigns' Enterprise Marketing Automation Sales Force Automation
Operational analysis is a method of examining the current and historical performance of an
operational (or steady-state) investment and measuring that performance against an established
set of cost, schedule, and performance parameters. An operational analysis is, by nature, less
structured than performance reporting methods applied to developmental projects (such as
Earned Value Analysis). It is more creative in nature, and should trigger considerations of how
the objectives could be better met, how costs could be saved, and whether, in fact, the
organization should even be performing a particular function. An operational analysis should

demonstrate that you have actually done a thorough examination of the need for the investment,
the performance being achieved by the investment, the advisability of continuing the investment,
and alternative methods of achieving the same investment results

Operational Customer Relationship Management (CRM)

CRM, an acronym for Customer Relationship Management is a broad term that covers concepts
used by companies to manage their relationships with customers, which may include attracting
the customer, analyzing the customer, and satisfying the customer. CRM is not simply advanced
technology; it is a comprehensive approach to customer relationship management. Straight
Marketing offers different types of CRM packages that accommodate customer relationship
management and can include anything from setting up policies and processes, to customer
service, employee training, marketing and systems/information management. To fill a companys
requirements, Straight Marketing considers a companys needs before determining the
best CRM tools.

What exactly is Operational CRM?

Operational CRM generally refers to services that allow an organization to take care of their
customers. It provides support for various business processes, which can include sales, marketing
and service. Contact and call centers,

data aggregation systems and web sites are a few examples of

operational CRM. If your company has a high customer turnover, or perhaps high service costs, Operational CRM
Solutions is a tool that can help you solve your problems. The high tech expertise of CRM gives you access to
information about your customer as well as giving you a clear view of your customers needs.

Examples of How Operational CRM Works!

To ensure that your customers receive the most personal attention possible, we at Straight
Marketing make the process and implementation of Operational CRM easy and professional. By
way of example, lets suppose you were overwhelmed with telephone calls each and every day.
In your desire to know the status and progress of the services you are providing, you might want
to speak with your customers, but there just isnt time. Instead of spending time making
telephone calls on a daily basis, Straight Marketing implements an operational CRM system that
allows your customers to log into an account via the web and view all the details of the service
being provided. Try to imagine the time you can save without having to respond to unnecessary

phone calls. As a result of Operational CRM, its a win/win situation for everyone. You are
responsive to the customer, your customer is happy with your service and everyone is getting
what he or she wants and needs. This is just one area of CRM that creates greater efficiency for
your company.

Analytical CRM
Analytical CRM analyzes customer data for a variety of purposes:
Designing and executing targeted marketing campaigns Designing and executing
campaigns, e.g. customer acquisition, cross-selling, up-selling Analysing customer
behavior in order to make decisions relating to products and services (e.g. pricing,
product development) Management decisions (e.g. financial forecasting and
customer profitability analysis) Analytical CRM generally makes heavy use of data
mining.

Analytical Customer Relationship Management (CRM)

As online companies continue to add new and often faster ways of interacting with customers,
the opportunity and the need to turn data about customers into useful information has become a
necessity. As a result, there are a number of software tools that have been created to analyze
customer data. As one of the most dynamic customer management tools, we at Straight
Marketing utilize Analytical CRM, as it addresses the analysis of customer data for a host of
different purposes. In general it is used to design and execute targeted marketing campaigns that
optimize marketing effectiveness. Analytical CRM takes into account product and service
decision-making as well as pricing and new product development. Try to imagine how efficient
your business would be if you knew what customers wanted and could quickly act on those
needs.

The Benefits of Analytical CRM

Analytical CRM provides customer segmentation. To illustrate, it divides customers into those
that may or may not utilize your services again, or gives you information that helps in the
process of your service. Not only does it determine profitability or which customers generally
lead to the most profit over time, it also provides the ability to market specifically to individual
customers based on the data collected. As a predictive modeling tool, Analytical CRM can help
your company compare future successes based on the customer knowledge database. Over time,
the analysis helps with business decisions founded on earlier analysis. When it comes to sales,
marketing and service, the benefits of CRM analytics are many and usually lead to better and
more productive customer relations. Rather than struggling to find out what makes your
customer tick, with CRM Analytics you know which people are going to be your best customers
and how to find your prospects, quickly and efficiently.
Understand Your Customers at a Higher Level
As a growing company, the information you can acquire through Analytical CRM is priceless. As
a marketing strategy, it delivers proven results across multi-departments. Rather than wasting
time trying to figure out things about your customer, CRM analytics helps you find out where
they are, who is your most profitable customer and what are their behaviors. Once evaluating or
identifying potential clients, you can deliver far more effective results. Investing your time and
money into Analytical CRM will more than support your important business decisions; it will
play a vital role in the success of your organization.

References
Bibliography/ Webliography
https://en.wikipedia.org/wiki/Securitization
http://www.investopedia.com/terms/s/securitization.asp
https://www.academia.edu/225858/Concept_of_Securitisation_and_Its_Role_in_Promoting_Eco
nomy_and_Capital_Markets
http://www.yieldcurve.com/Mktresearch/files/Teasdale_SecuritisationJan03
https://www.equitymaster.com/detail.asp?date=3/24/2001&story=3&title=SecuritisationProduct-of-the-new-millennium
https://www.google.co.in/urlsa=t&rct=j&q=&esrc=s&source=web&cd=11&cad=rja&uact=8&ve
d=0ahUKEwi9idvhl6zKAhWVCo4KHQf0AX4QFghNMAo&url=http%3A%2F
%2Fen.wikipedia.org%2Fwiki
%2FCustomer_relationship_management&usg=AFQjCNFsgG4bc5pDXSqZdZPsrWYnloKEcg
&bvm=bv.112064104,d.c2E
https://en.wikiversity.org/wiki/Customer_relationship_management#Operational_CRM

BOOKS
Bhattacharya, A., Fabozzi, F., (eds.), Asset-Backed Securities, FJF Associates, 1996