Imarticus Financial Services Newsletter

1. Edition II NEWSLETTER FINANCIAL SERVICES May, 2015 INSIDE THIS ISSUE 2 A Word from the Managing Director 3-4 Unravelling the Venture Capital Boom 5-9 Making the Case for Online Education 10 Sourcing to Placement: A Case Study 11 Imarticus Recommends: Good Reads

2. Dear Reader, 2014-15 was a Rubicon moment for Imarticus Learning as we set out to strengthen our product and regional portfolio as well as our corporate relationships. Looking back, we have achieved more than we aimed for. Our revenues have doubled, both on the back of a thriving retail business, which saw a 120% increase in our student base, as well as our Corporate Training business which saw us build mutually beneficial relationships with many of you. I thank you for continuing to believe in us, as well as our exceptionally talented team of over 100 professionals who make it possible. Human capital will only get you so far. This is where venture capital comes in to ignite and sustain startups with a pipe dream. You only have to scan the headlines of any newspaper to see that venture capital is exploding in India whether it is Tiger Global Management’s $85 million dollar investment in Delhivery, the logistics company or the mushrooming of e- commerce entrepreneurs and venture capital firms. But it takes more than just a few deals to re-create Silicon Valley and I explore the key cultural trends that are driving this renewed confidence in Venture Capital. The next notch on our goal post is Online Education and in this issue, Amit Ratanpal tackles the growing space of Online Education and e-learning. Globally, e-learning is a $56.2 billion business and that figure is expected to grow exponentially to $107 billion by 2015. With good reason: e-Learning offers cost savings, flexibility and repeatability in training and is less disruptive to corporate culture than classroom training. In this issue, we explore the learning options you can now add to your arsenal to train your employees. We are, of course, excited about the launch of our first online program on Capital Markets in June, 2015, with many more in the pipeline. Apart from Training, Imarticus also provides a range of Corporate Solutions designed to assist firms in meeting its skillset requirements. A case study showcases how we put in place the Sourcing to Placement model, a pioneering step in the professional education space, to source, train and onboard relationship managers at a leading Indian commercial bank. We are very excited about what 2015-2016 will entail and, as always, I look forward to hearing from you and hosting you at our offices in Mumbai, Bangalore and Chennai. Please do get in touch with us at corporaterelations@imarticus.com for any requirements or suggestions to serve you better. Regards Nikhil Barshikar Founder & Managing Director A WORD FROM OUR MANAGING DIRECTOR

3. After constantly being piped against China and always losing, it’s nice to be ahead of them for a change. Latest figures report that India has outpaced China in the number of deals struck by venture capital (VC) funds in the first quarter of 2015. 69 vs. 66 is small, but we haven’t had much to write home about in a while. VC Scoreboard India: 69 China: 66 UNRAVELLING THE VENTURE CAPITAL BOOM We still lag behind in value, but raising over a billion dollars in three consecutive quarters is no small feat —it’s more than a 200% gain over the previous year. As I write this, the Sensex crashed 723 points on the back of sustained FII outflows, lackluster industrial production numbers, worries about a delayed monsoon, and an underperforming and straitjacketed government. This is not due to Incredible India. So how has this come about? Is it hype or is our newfound love for start-ups here to stay? One big movement we have seen is the reach for scale. E-commerce firms are no longer the niche players catering to your disposable income. They want the share of your wallet that you spend on groceries (Bigbasket.com) and basic furniture (Urbanladder, Fabfurnish). That doesn’t mean niche players don’t exist but they need to ensure that the market is big enough and the value proposition, solid. Much of the success of Silicon Valley has been attributed to its ecosystem, a culture that fosters innovation. It’s like a little village where those who create, those who manage, and those who fund the creative process live together in a community focused solely on innovation. While we are yet to find our own little haven, some characteristics of that ecosystem have undoubtedly crept in. What are these characteristics? Nikhil Barshikar “ CREATING AN ECOSYSTEM THAT FOSTERS INNOVATION ” THE PERMISSION TO FAIL: The first and most important one is the permission to fail. The natural state of the start up is to die yet death is not looked down upon and failure is not discouraged. Today a number of Indian start-ups have failed. E- commerce websites shut daily, opening up again in six months time using a new avatar, better and stronger using their prior experience to build a stronger firm. DID YOU KNOW? Since 2010, SnapDeal changed its business model 3 times to become the retail behemoth it is today. RISK TAKING AND FOCUS ON GROWTH: Indian business has for most part always cared about the bottom line. Firms have repeatedly forgone growth in sales for better margins but this changed when Flipkart realized the only way an E- commerce logistics company would ever get big was to pump money in and gain value-conscious customers and sales through deep discounting. Pegging the Bottom line mentality: FLIPKART Pumping Money In!

4. Valuations have a big role to play in this as well. Between 1997 and 2008, India was ripe for private equity growth capital and firms invested in companies on the basis of profitability multiples that would ensure an exit. VC firms care about scale and the next round and the inevitable IPO that will make millionaires. The multiples in vogue now are revenue multiples and making losses just means you’re willing to do what it takes to be the last one standing. Contd. UNRAVELLING THE VENTURE CAPITAL BOOM MONEY: Earlier entrepreneurs were poor and the salaries they offered were poorer. Today’s news reported that Delhivery has just raised close to $85 million in a new round of funding led by venture capital firm Tiger Global Management Llc. They brought on board former FedEx Corp. executive Suraju Dutta and Bain and Co.’s Sandeep Barasia as managing directors. Working for a start up doesn’t mean foregoing your salary and owning a start up doesn’t mean you can pay peanuts; money buys talent. Consequently MBA students from the best schools are making a beeline for ecommerce. One in every nine students from the 2013-15 batch across 11 of India's top B-schools will join an e-commerce firm or startup after they graduate as compared to just one in 19 students in the 2012-14 batch. Salaries offered by startups have increased two fold in the last couple of years, with average salaries in startups ranging from 16-20 lacs. Average Startup Salary: 16-20 Lacs “ THE MULTIPLES IN VOGUE NOW ARE REVENUE MULTIPLES AND MAKING LOSSES JUST MEANS YOU’RE WILLING TO DO WHAT IT TAKES TO BE THE LAST ONE STANDING. ” NETWORKING VS. ‘CONTACT’: The era of pre-existing connections is coming to an end and rightly so. There is no old boy school network here; there’s just a ‘I have an idea’ network. Have something interesting to say? Well then you just have to find the right person who wants to hear it and, hopefully, pay you some money for it. Networks like Venture Nursery, Mumbai Angels and the India Angels Network foster conversation and have been created by venture capital firms, entrepreneurs, dealmakers and founders to meet a growing need. Today’s India, be it Mumbai or Bangalore, is teeming with VC firms from all over the world that are willing to bring in substantial capital. All you need a great idea and the capacity to execute!

5. GROWTH IN THE ONLINE EDUCATION MARKET The worldwide market for E-Learning is growing exponentially from $35.6 billion in 2011 to an estimated $51.5 billion in 2016 at a five-year CAGR of around 7.9%1. While the US and Europe dominate the eLearning consumption landscape currently (at 70%), it is Asia-Pacific which is the fastest growing market with eLearning revenues expected to grow at an annual rate of 20%2. $51.5 Billion (2016) With technological barriers reducing and priorities shifting away from traditional classroom training, online education or eLearning has become an accepted training medium across the world. There seems to be universal agreement that the worldwide E-Learning market will show fast and significant growth over the next three years. Growth Rate: 7.9% (2012-2016) MAKING THE CASE FOR ONLINE EDUCATION Amit Ratanpal Founder and Managing Director – BlinC Zenobia Sethna L&D Manager – Imarticus Learning Global eLearning Market Closer home, the eLearning industry in India was valued at $3.06 billion (Rs. 18.41 trillion) in 2010-20113. Increasing Internet penetration, low-cost existing coverage and rising demand are expected to help develop this market in the near future. Estimates suggest that the Indian market is likely to grow at a CAGR of 17.4% for the period 2013-183 as it transforms itself into a knowledge economy. Corporate Training: $ 200 Bln a Year Since 1995, corporations using eLearning has grown from 4% to 77% in 20114. “ THE WORLDWIDE MARKET FOR E- LEARNING IS GROWING EXPONENTIALLY FROM $35.6 BILLION IN 2011 TO AN ESTIMATED $51.5 BILLION IN 2016 ” The Corporate-training market, among the most cyclical within the education industry, is a $200 billion a year industry, of which $56.2 billion is attributed to eLearning4. the percentage of US We are already seeing a drastic shift in learning delivery in the corporate training market. While roughly 45%5 of all corporate training is still conducted using instructor led classroom training, we can see a drastic increase in the incorporation of eLearning in its various forms into the corporate training calendar.

6. The business case for eLearning gets stronger in direct proportion to the number of employees to be trained. Source: Trainingmag.com REASONS FOR GROWTH General L&D budget constraints appear to be the main drivers of the shift towards using eLearning. However, eLearning is not merely an attractive proposition during an economic downturn. It is also an efficient and cost-effective solution when employees—especially those in organizations with a geographically dispersed workforce— need to be brought up-to-speed quickly on relevant knowledge and skills. When used right, eLearning can used to drive competitive advantage, increase revenues and capitalize on new market opportunities. Contd. MAKING THE CASE FOR ONLINE EDUCATION Self-paced eLearning allows learners to assimilate content at their own speed — often 20% to 50% faster than in a classroom. Elearning also offers the benefits of flexibility (24/7 learning) and is less disruptive to normal operations of a company than traditional classroom trainings that block many hours of employee’s time at a stretch. ROI Watch ELearning also ensures consistency and repeatability in training delivered, thereby ensuring your learning objectives for your trainees and the resultant outcomes are more likely to be met. According to a report released by IBM, companies who utilize e-Learning tools and strategies have the potential to boost productivity by up to 50%. For every $1 that the company spends, it's estimated that they can receive $30 worth of productivity6. Finally, we have shifts in demographics which impacts the way training is delivered. The work force is now seeing the integration of technologically savvy Generation Y or Millennials; who by 2025, will make up 75% of the global workforce4. To cater to this target audience (with Baby Boomers fast catching up – Boomers are the second highest users of the Internet7), we see a rise in demand for interactive eLearning – be it games, simulations, videos etc. Other drivers of growth for e-learning in India include the large base of English language speakers as well as the acute shortage of brick- and-mortar educational institutions for higher education, which are largely responsible for the massive uptake in online learning through MOOCs (Massive Open Online Course) internationally. $1 Spent on eLearning “ EFFICIENT AND COST-EFFECTIVE SOLUTION WHEN GEOGRAPHICALLY DISPERSED WORKFORCE NEEDS TO BE BROUGHT UP TO SPEED .” $30 worth of productivity

7. ONLINE EDUCATION 2.0 Online training today has moved beyond traditional, self-paced eLearning modules known as web based learning (WBTs) that focused more on learner “seattime”– the time spent by the learner to read through the WBT. Today, seat time matters very little and instead the focus is on proficiency based learning that delivers performance on the job. Online education today encompasses not only the traditional WBT model, but also includes newer learning paradigms such as Flipped Class Model. Due to changing demographics, we see a dramatic rise in demand for video-based learning, gamification, simulations, mobile learning, and social or collaborative learning. FLIPPED CLASS MODEL: Educators increasingly look to the Flipped Class Model to deliver learning that is effective and cost-efficient. The Flipped Class Model essentially reverses the traditional classroom setup and redefines seat time. Knowledge is imparted as homework while class time is utilized for application of knowledge learnt. Learners view short video lectures or have access to lecture content at home before they arrive in class; while class time is used for discussions, exercises and projects. The results, as tested on a batch of high school students, can be quite astonishing! Contd. MAKING THE CASE FOR ONLINE EDUCATION “ BY 2025, LEARNING NUGGETS: ELearning is not “One size fits all”– Adult learners need to be put in the driver’s seat and control what they learn and how they learn. Accordingly, trainings personalized, competency-based learning paths that give the learner much needed flexibility. Shorter attention spans also mean learning is compressed into bite-sized nuggets of shorter duration for easier consumption. TECHNOLOGICALLY SAVVY GENERATION Y WILL MAKE UP 75% OF THE GLOBAL WORKFORCE.” One size does not fit all! need to have GAME BASED LEARNING: Game-based organizations on both a stand-alone basis and as part of a blended learning strategy. It is particularly useful to equip staff with knowledge and skills related to functions such as human resources management, marketing, customer relationship, etc. training solutions have become popular in

8. VIDEO BASED LEARNING: With longer a constraint, videos are an excellent way to impart learning in a more dynamic fashion. Studies have shown that video-based learning can be a more effective medium than text to enhance learner satisfaction and motivation during process6. broadband availability no 4500+ Video Lessons on Khan Academy Contd. MAKING THE CASE FOR ONLINE EDUCATION the learning BUSINESS SIMULATIONS: Working professionals need learning that is immediate, relevant, and contextual. Business simulations fill this gap by focusing more on application of knowledge. Simulations are complex training interventions that simulate, or mock up, real business scenarios or issues to promote strategic thinking, decision making, and problem solving. For instance, a role-play sales encounter with customers is the perfect training ground for your sales executives before they pitch to real clients. A MIX OF ONLINE AND CLASSROOM TRAINING There is no doubt that online learning does not always replace traditional classroom training setups. But it is an excellent way to complement your classroom training –this is where blended learning comes in. The Best of Both Worlds Blended learning, also called Hybrid learning, mixes emerging technologies with classroom or instructor-led training based on what’s most appropriate for particular content. For example, a WBT can be used as a precursor to classroom training for familiarization with subject matter, and also as a refresher many months after the classroom training. A leadership course might start with a self-paced eLearning module on leadership basics with some instructor-led virtual classroom sessions to discuss concepts, followed by a two-day classroom session to practice leadership skill scenarios and get feedback. ONLINE EDUCATION FOR THE FINANCIAL SERVICES SECTOR Since the arrival of e-learning in the mid-1990s, the majority of Financial Services organizations have implemented some sort of e- learning solution although the range of what this encompasses varies widely. Many have simply implemented point solutions while others have rolled out e-learning to multiple areas of the organization. “ THERE IS ALSO THE REALIZATION THAT ONLINE LEARNING DOES NOT ALWAYS REPLACE TRADITIONAL CLASSROOM TRAINING SETUPS. ”

9. The training requirements in the financial services sector are particularly gruelling. Organizations must typically deal with geographically dispersed staff and rapidly changing knowledge requirements as well as heavy regulatory and legal compliance obligations. The current speed of change means that employees need to be trained constantly in order for companies to avoid the dangers of being out-thought and out-maneuvered by competitors. Online learning, particularly as a stand-alone learning strategy, works best when the training need is to impart knowledge on processes or standards or to disseminate information widely and quickly. Contd. MAKING THE CASE FOR ONLINE EDUCATION When Online is Best? AML/KYC, Legal Compliance and Regulations training are prime candidates for WBT-based eLearning in the Financial Services sector. Process-driven curriculum such as that of a Trade Life Cycle would benefit from more complex interventions such as Simulations. On the other hand, some trainings are not suited for eLearning and will require human intervention – for example, Soft Skills training or those requiring live demonstrations or group interaction. It is therefore vital that we evaluate the training need and the target audience before zeroing in on the medium of training delivery. An imperative question one needs to ask is, “Which is the correct mode of training to promote an effective solution for a specific training requirement?” Knowing your available options and analyzing suitable solutions for a learning need will help in delivering cost- effective, goal-oriented and skill-enhancing learning solutions. “ THE CURRENT SPEED OF CHANGE MEANS THAT EMPLOYEES NEED TO BE TRAINED CONSTANTLY IN ORDER FOR COMPANIES TO AVOID BEING OUT- THOUGHT AND OUT-MANEUVERED BY COMPETITORS. ” SOURCES: 1. Docebo report, 2014 2. Sh!ft Learning 3. Docebo report, 2014 4. Shift Learning 5. Trainingmag.com 6. eLearningindustry.com 7. Deloitte Millennial Survey, 2014 8. Choi and Johnson, 2007; Shyu, 2000

10. Sourcing to Placement: A Case Study The Business Need: A leading retail bank wanted to hire skilled resources as Relationship Managers across India in a sustainable and cost-effective manner, and was looking for partners who will take ownership in sourcing, training and onboarding fresh and experienced post-graduates. BUSINESS CASE: EARLY 2014 Job Ready Model THE PRE- SELECT JOURNEY BEGINS: JUNE, 2014 SELECT SOURCE TRAIN HIRE THE PARTNERSHIP BEGINS The Relationship Manager Program was launched in July, 2014 with a pilot batch of 65 candidates across Mumbai, Chennai & Bangalore. CURRICULUM The program was a 2-month course that trained candidates on Retail Banking, bank-specific processes and products, and Soft & Sales Skills SOURCING CHANNELS: • RETAIL: Targeting freshers and experienced candidates • CAMPUS: Targeting freshers Students successfully placed as relationship managers at the bank Students cleared NISM Mutual Funds & Depositories exam 99% 100% In light of the remarkable success of the first batch, we immediately initiated sourcing for the second and third batch, which went live in November’14 and February’15 respectively, resulting in 200+ candidates successfully being sourced and placed in the bank. A NEW CHAPTER NOV, 2014 CAMPUS BATCHES After the success of the first 2 retail batches, the bank reiterated their confidence in us with the additional responsibility of initiating the same program at 3 select colleges. THE JOURNEY CONTINUES: MAY, 2015: Sourcing for New Programs on Retail Banking Sales and Trade Finance Sourced till date: 5000+ candidates Trained till date: 500+ candidates Placed till date: 450+ candidates SUMMARY:

11. Imarticus Recommends: Good Reads THE LION WAKES: A MODERN HISTORY OF HSBC David Kynaston and Richard Roberts Acclaimed historians Richard Roberts and David Kynaston chronicle HSBC’s humble origins, its struggles as well as its successes. Meticulously researched and generously illustrated, this is a note-worthy read for anyone interested in global financial history. MORE MONEY THAN GOD: HEDGE FUNDS AND THE MAKING OF A NEW ELITE Sebastian Mallaby Do hedge funds really make more money systematically? Do they need to be regulated? Find answers in financial writer Sebastian Mallaby’s new book as well as insights into key players like Soros and Druckenmiller. This book tells the inside story of the hedge funds, from their origins to their role in the financial crisis of 2007-09, offering the clearest, most readable and reasoned discussions of the efficient-market theory and Soros' reflexivity. HEAVEN'S BANKERS: INSIDE THE HIDDEN WORLD OF ISLAMIC FINANCE Harris Irfan In this groundbreaking and globetrotting exploration, Harris Irfan, one of the world’s leading Islamic finance bankers, debunks the myths of Islamic banking, analyzes its greatest deals and looks to the future of a system that has reprioritized the very nature of money itself. INVEST WITH THE FED: MAXIMIZING PORTFOLIO PERFORMANCE BY FOLLOWING FEDERAL RESERVE POLICY Robert R. Johnson, Gerald R. Jensen, Luis Garcia-Feijoo Invest with the Fed demystifies Federal Reserve policy, shows how different investments are impacted by Fed policies, and provides a research-based portfolio strategy for investors to consider Fed policies in their investment strategies and thereby accurately forecast security market performance. BECOMING STEVE JOBS: THE EVOLUTION OF A RECKLESS UPSTART INTO A VISIONARY LEADER Rick Tetzeli How did a young man so reckless and arrogant that he was exiled from the company he founded become the most visionary business leader of our time? If reading Isaacson’s official bio left you wanting more, this is the book to read. An excellent exposé on the growth and evolution of Steve Jobs, his triumphs, his failings, his heart, and his vision.

12. CORPORATE OFFERINGS AGILE HIRING Ready Placements at No Cost Key clients include majority of the large Investment Banks and Financial Services firms in relevant domains SOURCING TO PLACEMENT 2-3 month programs targeted towards onboarding specific trained resources in large numbers Key clients include Deutsche Bank, eClerx, Goldman Sachs, HSBC, Polaris, HDFC Bank among others TEMPING 6-9 month resource staffing in Investment Banking Operations Key clients include Goldman Sachs and Morgan Stanley CORPORATE TRAINING 2-10 day programs targeted towards employee skill development trained resources in large numbers Key clients include BNP Paribas, Deutsche Bank, CLSA, Northern Trust, HSBC BENEFITS TO YOU SCALED & TRAINED RESOURCES JUST IN TIME The collaboration between Imarticus Learning and our clients has created a highly skilled pool of over 2000 job ready candidates who have an in-depth understanding of the product and processes. Our solutions enable clients to hire skilled resources just in time with their business needs. In addition, the training we provide ensures that the employees are productive from day 1. PARTNERING IN YOUR GROWTH MOVING UP THE VALUE CHAIN Our ability to comprehend their requirements and implement appropriate solutions means we are venturing into niche areas such as bespoke learning solutions where we can contribute to the dynamic needs of our clients. We are able to cater to recruitment needs and provide our clients with highly skilled resources for complex functions and transitions. This scaled capability building helps our clients to offshore functions in India that were never considered possible or viable before.

13. ABOUT IMARTICUS LEARNING Imarticus Learning is formed to bridge the gap between Academia and the industry. The firm provides a range of Corporate Solutions designed to assist firms in meeting their skillset requirements. Headquartered in Mumbai, Imarticus has delivery capabilities across India with dedicated centres at Mumbai, Bangalore, Chennai, and satellite centres at Pune and Jaipur. HIGHLIGHTS Training and content delivery capability, across the areas of Investment Banking, Finance & Treasury, Capital Markets Operations, Business Analytics, Technology and Consulting. Preferred sourcing and corporate training delivery partner for leading Global Banks, Consulting, KPO, Technology and Analytics firms. HEAD OFFICE Imarticus Learning Pvt. Ltd. 5th floor, Raaj Chambers, Old Nagardas Road, Andheri (E), Mumbai - 400 069 Tel: 022-40792314 / 40792315 Range of customized delivery methods such as instructor led training, e- learning, workshops and seminars for optimal training effectiveness. BANGALORE Imarticus Learning Pvt. Ltd. No.143, B 1st Floor, 60 feet road, 5th Block, Koramangala Bangalore - 560 095 Tel: 080-45129914 / 45129924 Mob: +91-9008668548 / 8971729953 CHENNAI Imarticus Learning Pvt. Ltd. 2nd floor, East West Centre, 128, Nelson Manickam Road, Chennai – 600 029 Tel: 044-43558466 / 45642104 Mob: +91-9789879741 EMAIL: corporaterelations@imarticus.com WEBSITE: www.imarticus.org