Artificial Intelligence and Risk Management

How Can Artificial Intelligence help Investment Banking Risk Management?

Beyond Just Calculations….

The risk management algorithm has always been more about complex calculations. There are various models such as the binomial model, VaR (Value at Risk), Black-Sholes Morten model. These models are put into different simulation modeling algorithms such as Monte Carlo simulation, GARCH (1, 1) also known as Generalized autoregressive conditional heteroskedasticity model, EWMA, which are currently used by the banks. CME (Chicago Mercantile Exchange) developed risk management algorithms PC-SPAN for portfolio margining

• SPAN has been reviewed and approved by market regulators and participants worldwide.
• SPAN is the official Performance Bond mechanism of over 50 exchanges and clearing organizations worldwide, making it the global standard for portfolio margining

Risk management is the application of the risk management process which consists in:

The future challenge to integrate Risk management in every area of a company means “operational,” “economical”, and “strategically, Enterprise Risk Management (ERM) will be a need for the future management processes.

The latest developments that are shaping up in the Fintech focused on the Risk Management is an application of Artificial Intelligence in the Financial Risk Management.

How different methodology of a quantitative risk analysis to develop a formal risk management can leverage Artificial Neural Networks

What is similar between an engineer controlling an industrial facility and a bank operations manager controlling payment processing? Both deal with operational risks that require immediate action at the earliest sign of trouble.  Process for both is same as described in below diagram

Financial Institutions are primarily risk managers and manage a variety of financial risks — market, credit, operational, currency, liquidity, and others. For having a robust risk management the bank need to ensure that it should embrace data-informed technologies that are being applied to the following

 

Why need the Black Box?

Data-Informed Operations

Data-informed operations are the basis for day to day operations. No matter how sophisticated the data collection and processing systems are, a trained human is ultimately responsible for making critical decisions.  The bank operations managers can perform exception processing and error recovery based upon system-generated communications.

Any analytics applications that are guiding their decisions will submit their findings to a human,  to effect any changes to operations. The reason why operations department run by large sized teams who are challenged to keep improving their effectiveness through improved process and use of the latest cutting-edge technology.

Chasing False Alarms

Risk management teams use expert systems, primarily based on rules, to monitor operations and generate alerts. Expert risk managers set alerts based on rules, historical thresholds, specific KPIs, and the tuning of each of these over time takes up a lot of the time of experts to maintain the balance between risk exposure and team efficiency, and that has its consequences.

One of the biggest challenges of improving effectiveness is false alarms raised by analytics technologies currently used. Not being sensitive enough means that the risk exposure is higher, being too sensitive also means the operations team under much pressure is chasing false alarms.

No algorithm is useful in isolation, but instead from the perspective of how it interacts with its environment (data sampling, filtering, and reduction) and also how it manipulates or alters its environment. Therefore, the algorithm depends on an understanding of the environment and also a way to manage the environment

Any rules-based systems pose a major dilemma to an operations person because; the cost of missing an actual exception, models may be tuned extremely conservatively. As a result of this, it significantly increases operational cost, but they also create “alarm fatigue”, in which operators expect false alarms to such an extent that they miss a genuinely positive and allow an improper transaction.

Harry Henderson proposed an AI model which has both the old rules memory and a working memory where the model intelligently learns from the current environment and the rule matching system quickly re-tweaks the rules so as to avoid false alarms without losing the original exceptions

 

 

Trends and Human Processing (What is in the BLACK BOX?)

A robust risk management is about dealing with real-time transactional data and historical trends/learnings; there is an important aspect of time that affects how decisions are made. In general, humans are good at interpreting simple trends by looking at slopes and levels, but human have limitations to describe complex patterns. A solution to the problem is if expert AI systems can encode these trends

The problem with the AI system is when different pieces of information don’t arrive at the same time or rate, incorporating the trends in such data into any AI system tends to be difficult.

For example – In the case of the Monte-Carlo simulation the inputs may be fixed, but the frequency of the inputs A, B, C, and D may vary leading to which the random number generation of the Monte-Carlo model(MCM).  May not follow the probability distribution curve which is a function of (PDF), to ensure that various risk has been factored the outputs of the MCM  would be evaluated and tested for the hypothesis using multiple regressive inputs to validate the confidence level of the model.

A critical aspect for the Risk Modeler is to select the appropriate distribution function according to the data available; it can follow any Log function, Normal distribution, Chi –squared distribution function, etc. The modeler also needs to understand the behavior of the data in the practice; typically it is based on an available historical database.

Monte Carlo Simulation Model for risk assessment

This problem is exacerbated in financial services applications where trends are formed (and change) over periods of days, weeks or even years. Operations users cannot be expected to recognize long-term trends in customer behavior without expert system assistance. The result of such difficulties is it increases the number of effort people has to put into confirming alarms by interpreting patterns.

 

Expert instead of Learning Systems (Mind in the Box)

The next issue is that expert systems do not change by themselves as they have to be programmed by experts. The main advantage of AI system is that the whole process (training and testing) mimics the human brain reasoning like learning occurs in the minds of experts who then apply the lessons of their learning into the next versions of the rule engine base.

With the rapidly changing financial business and data landscape, the operational systems have not evolved quickly enough. This leads to more risk exposure and less optimized use of the margin money.

For example – Game of Chess

But then the questions comes Can machine ever have a mechanism to reach a conclusion based on just common sense which is beyond logical reasoning? Can machines present facts which are beyond the mathematical formulas? Can machines make a logical deduction of the cases which has the rarest or the rare possibility of occurrence to ensure optimal use of time and resource?

Would AI system get thumbs up or thumbs down in future, is something that only time will tell, as the commercial application of AI has to withstand the challenge of diversity as different Banks, Insurance companies, funds and financial firms don’t speak the same risk – language. Never the less each one of them performs the cost-benefit analysis, sensitivity analysis, scenario analysis which permits to perform both the quantitative and qualitative analysis

 

Happy Reading!!

Abhinav Gupta

Reference data Systems – Legacy Modernization and Transformation

What is Reference data, in the financial industry?

The Industry Definition of reference data is that foundational data that provides the basis to generate, structure, categorize, or describe business transactions. The Reference data is the basis to view, monitor, analyze and report on transactions.  The below diagram shows that there are five main elements of a financial transaction some of the  

Drivers for Legacy modernization of reference data systems

Reference data systems are critical for a bank or financial institution and are the core asset of the bank. These systems should be adequately managed, governed, enhanced in a systematic fashion. The reference data system impacts all the operational functions of a bank. However when it comes to managing these reference data systems to drive the business; most of the banks/financial institutes are using on old technology stack.

With the continuously changing regulatory requirements, increase physical and information security challenges it has become imperative for the banks to use the twenty-first-century technology ; to simply management of the financial instrument, client and counterparty accounts, market data, historical transactional data information like the settlement instructions, etc. to minimize the risk by reducing the overall complexity

Key Points considered for defining the modernization initiative at any financial institution

• Decompose monolithic applications into discrete services and process flows by creating componentized applications and services which are agnostic in nature
• Architect for real-time straight-through-processing prefers to eliminate batch cycles which help in moving the system from EOD process to near real time process
• Segregation into business services and common services, which would decouple the core business service system with the common services. For example – creating a common module for tax calculation for different types of trades and asset service transactions
• Provide centralized user access/experience via Securities Workstation, which reduces the complex configuration management systems. Users should be allowed to login into multiple systems using single sign-on
• Business exceptions should be handled by a standard work-item management layer, having a proper workflow management system with 4 eyes (maker-checker) reducing the operational inefficiencies
• Data stored in a golden master database, creating a golden copy helps reduce the overall risk associated with the operational workflow and running predictive analytics on top of golden copy database would yield a better result with higher confidence levels

 

Abhinav Gupta

Blockchain 1.0 – How Bitcoin works

Blockchain revolution is broken down into three categories: Blockchain 1.0, 2.0, and 3.0.

• Blockchain 1.0 is currency, the deployment of cryptocurrencies in applications related to cash, such as money transfer, remittance, and digital payment systems.
• Blockchain 2.0 Contracted, the entire slate of economic, market, and financial applications using the blockchain that are more extensive than simple cash transactions: stocks, bonds, futures, loans, mortgages, titles, smart property, and smart contracts.
• Blockchain 3.0 is blockchain applications beyond currency, finance, and markets—particularly in the areas of government, health, science, literacy, culture, and art.

Bitcoin

• Bitcoin is digital cash. It is a digital currency and online payment system in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
• Bitcoin is pseudonymous (not anonymous) in the sense that public key addresses (27–32 alphanumeric character strings; similar in function to an email address) are used to send and receive Bitcoins and record transactions, as opposed to personally identifying information.
• Bitcoins are created as a reward for computational processing work, known as mining, in which users offer their computing power to verify and record payments into the public ledger. Individuals or companies engage in mining in exchange for transaction fees and newly created Bitcoins. Besides mining, Bitcoins can, like any currency, be obtained in exchange for fiat money, products, and services. Users can send and receive Bitcoins electronically for an optional transaction fee using wallet software on a personal computer, mobile device, or web application
• Bitcoin: A Peer-to-Peer Electronic Cash System

Bitcoin Landscape –

How Bitcoin Works

Suppose Alice wants to buy a coffee in Bob’s café, and her friend Bob wants to send money to bob’s café who accepts money into Bitcoin

The payment requests QR code

encodes the following URL, defined in BIP0021:

• bitcoin:1GdK9UzpHBzqzX2A9JFP3Di4weBwqgmoQA?
• amount=0.015&
• label=Bob%27s%20Cafe&
• message=Purchase%20at%20Bob%27s%20Cafe
• The bitcoin network can transact in fractional values, e.g., from millibitcoins (1/1000th of a bitcoin) down to 1/100,000,000th of a bitcoin, which is known as a Satoshi,
• In simple terms, a transaction tells the network that the owner of some bitcoins has authorized the transfer of some of those bitcoins to another owner. The new owner can now spend these bitcoins by creating another transaction that allows to transfer to another owner, and so on, in a chain of ownership.

Bitcoin Transactions

Transactions move value from transaction inputs to transaction outputs.An input is where the coin value is coming from, usually a previous transaction’s output. A transaction output assigns a new owner to the value by associating it with a key. The  destination key is called an encumbrance.

Constructing a Bitcoin Transaction 

• Step 1 – Alice’s wallet application contains all the logic for selecting appropriate inputs and outputs to build a transaction to Alice’s specification, Alice only needs to specify a destination and an amount and the rest happens in the wallet application without her seeing the details
• Step 2 –If the wallet application does not maintain a copy of unspent transaction outputs, it can query the bitcoin network to retrieve this information, using a variety of APIs available by different providers or by asking a full-index node using the bitcoin JSON RPC API 
• Getting the Bitcoin Wallet balance in sync with the network.
  • Step 3 – With this information, Alice’s wallet application can construct a transaction to transfer that value to new owner addresses.

   

• Creating the output
  • Step 4 – In simpler terms, Alice’s transaction output will contain a script that says something like, “This output is payable to whoever can present a signature from the key corresponding to Bob’s public address.”

   

• Getting the balances back in Alice wallet
  • Step 5 – This transaction will also include a second output, because Alice’s funds are in the form of a 0.10 BTC output, too much money for the 0.015 BTC cup of coffee. Alice will need 0.085 BTC in change. Alice’s change payment is created by Alice’s wallet in the very same transaction as the payment to Bob

   

• Adding the transaction fees
  • Step 6 for the transaction to be processed by the network in a timely fashion, Alice’s wallet application will add a small fee. Alice creates only 0.0845 as the second output, there will be 0.0005 BTC left over. The resulting difference is the transaction fee that is collected by the miner as a fee for including the transaction in a block and putting it on the blockchain ledger

  

Adding the Transaction to the Ledger

• The transaction created by Alice’s wallet application is 258 bytes long and contains everything necessary to confirm ownership of the funds and assign new owners. Now, the transaction must be transmitted to the bitcoin network where it will become part of the distributed ledger (the blockchain).
• If Bob’s bitcoin wallet application is directly connected to Alice’s wallet application, Bob’s wallet application might be the first node to receive the transaction. However, even if Alice’s wallet sends the transaction through other nodes, it will reach Bob’s wallet within a few seconds. Bob’s wallet will immediately identify Alice’s transaction as an incoming payment because it contains outputs redeemable by Bob’s keys. Bob’s wallet application can also independently verify that the transaction is well formed, uses previously unspent inputs, and contains sufficient transaction fees to be included in the next block.

Reference – Minimum Viable Blockchain

Thanks

Abhinav Gupta

Next Topic – Bitcoin Mining for Dummies

 

Minimum Viable Business Analyst

That intersection is what is called the Minimum Viable Business Analyst (MVBA), and it defines a set of skills or knowledge that are useful to be an effective generalist business analyst, one who can work on almost any project

The above diagram is simple; the intersection of these skills is what makes a business analyst the most successful business analysts in today’s organization. When I started my career more than a decade back I thought I would structure my learning in every area of the diagram, but what I did not know was which area to focus. Initially, I tried learning everything, but then I realized there is so much to learn and there is not much time I have to master all the areas.

Any project that I did was completely different from what I did the last time. This could be due to any one or more reasons that the current project and the previous project is in the different domain, with the different set of stakeholders, Budget & Time constraints, Quality requirements and User requirements etc. The whole idea of being a business analyst is to create a new solution that business/user wanted.

In order to explain the MVBA and why the industry needs generalist or the intersection of the skills in BA as highlighted in the above diagram, I would try to explain in simple language.

Being a Domain Specialist

As a BA, the most important part is you should understand the language the customer is speaking in order to take down the requirement. One needs to understand the core business case why the user wants his product, what is his current set of problems and what is it trying to achieve at the end of the project. Having domain knowledge helps communicating both verbally or in writing easier for the BA and this is one of the most important skills which makes the BA a thousand times more effective as it helps to articulate what the client wants and also spell out the challenges he might have in the solution that he already has it in his mind. How many times the clients comes up with a pre-proposed solution and says “This is all I want…” an effective BA would help him see through the cracks of his solution and identify the leaks and give then a solution that avoids the leaks.

The fastest way to learn — Quick Googling of those terms will teach you some of the important concepts that would help you to understand the benefits and challenges in the current business process. Doing a quick comparative study of the competitors would help you to create a USP for your customer. Knowing domain in more details would help you to solve the problem in a different way and also how different business functions and layers of business talk to each other.

Being a UI/UX Expert

The UI/UX skill is in growing demand for a BA these days and having the UI/UX knowledge with the BA would make a winning combination. This is a primary job of the developer, so ask a UI/UX guy to do it but when he/she comes up with the design; ask them to walk you through each component one by one and explain to you what the system does. Now, what makes you a better business analyst is to ensure that the user experience is aligned to what would help the user to do his business in an easier way. Another thing is to ensure the system does not have complex UI, the design should be consistent and suite the technical as well as business requirements.

BA with UI/UX knowledge is a winning combination for a modern enterprise, as the solution must be found quickly to avoid costly delays in the project.

 

Imagine that you are in middle of a requirement elicitation workshop with the clients and it is getting difficult for the client to imagine the solution that you are proposing, Business Analyst may create wireframes the developer uses to produce the screens, and the developer may be responsible for decisions such as when to use a button vs. a link, or radio buttons vs. a drop-down menu to provide options to users. This would help to get the approvals from the client quickly and also give clients a sense of the look and feel of what the solution might be

The fastest way to learn– Talk to your developer/designer they would know the design patterns that they use. Trying out hands on some applications like Balsamiq to give the first-hand information to the designer. Participate in JAD sessions with the user, designer and the technical architects which help in understanding the UI/UX design decisions they would have taken in the past and also introduce you to the style guides and the UI libraries.

Being a Project manager

Until few years back the BA and PM were considered to be two separate skill sets, which is true today but a lot of the organizations these days have started having roles such as BA/PM. Being a PM is boring (No offense to all the Project managers) but most importantly you can’t run a project without a Project manager

Project management skills are the cement that binds everything, and learning this skill is a hard one, to be an effective project manager takes a lot of time and experience. You can read up all you want, but at the end of the day, it’s a human behavior problem. There are no shortcuts to enhance your interpersonal skills, communication skills and I think it only comes with time and experience and with dealing with people

An Effective Business Analyst needs to be a “PEOPLE PERSON” rather than a “PROCESS PERSON” in today’s agile environment

The fastest way to learn — in order to accelerate the learning process is to talk to people, understand the common problems encountered by your team and other project teams and how those problems were solved. Going thru the lesson learned documents of old projects there is a learning value to their philosophies behind their approaches.

Being a Tester

Testing is a specialized discipline, regardless of the size of the project there would always be a testing phase in that project and the success of the project depends on does the system is made as per the laid requirements. Unfortunately, the Business analyst does not give a lot of importance to testing. As a BA, you need to ensure that the product is built right which meets all the client requirements (even if that seems impossible).

As a BA need to be involved in testing and the focus should be on “breaking the product or the output” the testers are usually attempting to identify the faults in the product based on the document that the Business analyst wrote. It is almost inevitable that BA can document everything; there are always some unsaid requirements. It is not a tester’s domain to question whether it is a significant fault in terms of the overall outcome of the project. Resolving the fault with some workaround is not a tester job. Doing testing or User acceptance testing (UAT) is very important for a business analyst as all aspects of the analysis function may need to be quality-assured.

The fastest way to learn — The best way of learning how to test effectively is to Jump in the water and start swimming!! You can also read more about the testing methods on the internet or by grabbing the testing books.

 

WARNING!! Should not be a rabbit hole !! for a BA and you should know when to stop digging. One should also remember that there should be no conflict of interest with the Testing team as for a successful project delivery an Independent verification and validation is almost a must.

The whole concept of having a generalist or an MVBA (minimum viable business analyst) in today’s scenario varies from organization to organization, I think the intersection of the 4 skills is what is required to reduce the time of shipping of the project and delivering the value to the stakeholders in the most cost-effective manner with great quality.

Hope that this might have helped you in your quest to learn more and be a better and successful Business Analyst helping the organizations and their customers achieve their goals

Happy Reading!!

Abhinav Gupta @abhi13aug

Also at medium.com/@ABHI13AUG

Future of Wealth management Platforms

The Customers don’t care about the platforms; all they care about is the services, experience and the reliability of the platform. 

Wealth management firms can no more compete on price, they are moving towards the value of outcome

Based on the key drivers of the wealth management business, below is the proposed business architecture for the wealth management firms in order to maintain the competitive advantage.

Forward thinking firms are combining both the client facing and back office technology to support multiple client and advisor segments

Making the customer experience and applying technology to improve it across various platforms would drive the long-term loyalty of the customer. The consistent customer experience across the various line of business is the key driver.

Wealth management firms struggle with silos of each product offering, as there is no integration with the front office to the back office application, making it difficult to maintain consistency – IBOR & PBOR solution would help them cover come the current problem

Apart from the customer wealth management advisory firms also needs real-time information and new ways of advisory life-cycle management, which would play an important role in getting more business and as the business grows, need to more sophisticated platform grows.

As the retail wealth management advisory models evolve to reflect increasing needs of the clients they bring more value added services to the clients, the firms at the same time need to keep a tap on the price of the wealth management platforms.

Today the clients are better informed and more technically capable than ever before, with the advances in consumer technology and the 24/7 news cycle enable seamless and almost limitless access to markets information to the clients makes it more and more difficult for the traditional wealth management advisory firms

Driving competitive advantage through Margin System

Future trends of Margin System 

• By adopting this Integrated Margin Management framework, companies can drive competitive advantage by unlocking significant margin opportunities that were previously hidden, the use of sensitivity analytics and “What if” analysis features for getting the holistic picture of each counterparty positions
• An understanding of the true drivers of margin and access to richer, more granular information about performance is essential to enable margin-focused decisions. Which includes effective liquidity and collateral position management.
• Harmonize a diverse set of global operating entities and unlock global capability, scale and synergies to converge and standardize global processes, data and systems.
• Developing a standard infrastructure to support these segregation requirements globally will be critical given the growth and complexity of segregated accounts.
• Companies need to embed margin management with effective IM analysis and drill down for speedy dispute resolution.
• Investment and central/external capacity fully leveraged to execute on margin opportunities and management of margin buffers more effectively
• Margin initiatives balance cost reduction and value creation to provide a holistic response.

Based on the E&Y, KPMG and PWC research report

Showcasing all the core functional attributes of a Global Agnostic Margin System…

 

What steps can Business Ops and Technology department take to achieve synergy and agility?

Primarily the Operations and the Technology departments are working in silos in any organization, both operations, and the technology has multiple global stakeholders requesting for product or process enhancement. It’s hard to get a holistic picture of the product issues for a product and the process manager due to the agility involved in the highly complex process and products.

The stakeholders share their strategic product “needs” directly with the technology for example in the case of any regulatory enhancement this would directly come as an enhancement request to the technology dept. Whereas what the business “wants” for example a report, or some data element on a screen comes from the operations user to the technology dept.

Creating efficient process is now a key concern for business managers and technology architects, and there is a need to respond to disruptive innovation in the Financial Services sector. The technology dept. needs to support growth and return to the emerging “customer centric” world versus the traditional “product-centric” view.

What is needed? And how?

• Cost efficiency via standardization
• Faster time-to-market through deployment of integrated and tested components
• Better operational control and Transparency through operations tracking and built-in performance measure
• Standardization and use of best practices for product development and process optimization. Various departments need to share their best practices and success stories with each other and share the utilities that could help in improving the overall process.

 

To have a fully integrated product and process solution there has to be a constant feedback between the ops and the technology department. Both the ops and the product development should use the same tool for incident management to get the holistic picture of the current state of the business, ultimately both the business goals and the technology goals need to tie to each other.

Abhinav Gupta

Public Profile –

https://in.linkedin.com/in/abhi13aug

Twitter @abhi13aug

The way forward in “IT industry”

When a fresher asked me the way forward – Getting “Certification” or getting a “Mentor.” 

Either way, you have to learn something in life. The point is you can take years to do it, or you can learn fast, might as well just learn fast and get on to the big stuff.

I think getting a Mentor or Guru, is one of the best things that can happen to someone, but again it is the tough way forward.
You will reach your goal sooner; it’s like if you want to reach from point A to B, you have two ways, either you know how to swim or you hold on to a boat.

In ancient times, students used to go to Gurukul, A Gurukul (Guru refers to “teacher” or “master”; Kul refers to “family”.) The Gurukul is the place usually residential type, where the students learned from the guru and also helped the guru in his day-to-day life, including the carrying out of mundane chores such as washing clothes, cooking, etc. The education imparted thus, was a wholesome one. 

If you compare it with our office, you spend more time with your boss then with anyone else, it would be like getting the best of the world if you get a boss who is like your guru. Unfortunately, it is not a one-sided affair, which a lot of people don’t understand. If you want your boss to be your guru get ready to the Gurukul style by doing mundane chores.

Having a mentor, the result is better for two reasons. The first benefit is that learning by doing is free. You pay no tuition fees. So what is the catch? You have to be patient. You don’t have to be scared of not knowing.The Second benefit is you will reach there sooner, even after you learn you still have to please someone that you know it, whereas the other path is getting there by doing it, chances of success are higher Because you’ve done it, not just studied to do it.

I did almost 20 certifications,  in so many areas, I may think that I know a lot, but someone above my pay-grade does not know what I am capable of, that’s where is the gap.On the other hand, one of my colleague who never did a single certification is three levels above my pay-grade at the same age.

Guru understands that if he needs to be the Guru Drona, he needs Arjun’s or Eklavya’s.

My search of the Guru is still on..

Abhinav…

 

3 D’S OF PRODUCT MANAGEMENT – DISCOVER, DEVELOP AND DELIVER.

Discover –  Selecting the new product opportunity

Opportunities abound in this world of ours! The challenge is to select and focus on the ones that will yield the desired result. However, what is the desired result for the company?
Does it result in revenue generation, cash flow, or profit, or does it represent tangible, long-term growth for the company, strategic positioning, and operational requirements?  Is it achievable, desirable, and agreed to? You need to know your customer, your target market and the competition as a product manager do as extensive research vetting out which one you want to pick

Develop  What’s the STRATEGY – One Time Hit or Steady Game?  

 

 What makes you think that this product would take off?

 

Few products can succeed as a one-time hit without a subsequent market and product development. It simply puts the organization in a market position that is not defensible. But having said that a single success can not and will not remain in the market for very long uncontested, someone would copy the product add some new features and “RISE OF COMPETITION”, thus necessitating the need for continued development as I think both Innovators and Infringers have their own space,  and both are creative in some sense or the other, Most of the new startups in India have been exact or similar to startup’s in the US, whether it was #Flipkart or #OYO rooms, still creative enough to make an impact.

 

DELIVER – HOW DO YOU HOOK THE PRODUCT IN THE MARKET?

Every product has a distinct  marketing feature, as a salesman you would never go to the customer and tell them that our product is exactly the same as the other, You would say it’s similar, but has this more functions,  cost less, easy to use etc. etc. are all product design tactics designed to make the product more marketable.

Need to find the HOOK, that generates sales and deliver Return on Investments (ROI).