FINACIAL SERVICES

BY MINISHA GUPTA LECTURER (FINANCE)

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Topics to be covered
• Introduction • Features of Financial Services • Functions • Types • Constituents • Factors affecting Financial Services • Growth of Financial Services
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FINANCIAL SERVICES
• Services that are financial in nature. • Part of financial system consisting of financial institutions, markets, instruments etc. • The “Financial Services” can also be called “Financial Intermediation”. • Financial Intermediation is a process by which funds are mobilized from a large no of savers and make them available to those who are in need of it and particularly to corporate customers.
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Features of Financial Services
• Intangible in nature. • Inseparable from the provider. • Customer centric. • Dynamic in nature • Credibility of partners is very important in them.
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Functions of Financial Services
1. Mobilization of Funds. 2. Effective employment of funds. 3. Provision of need based services 4. Provision of regulated services 5. Enhancement of economic development.
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Types of Financial Services
Financial Services

Commercial Bank
• Private banking • Investment Banks • Bank cards • Credit card machine services and networks

Investment Services
• Asset Management • Hedge Fund Managers • Custody services

Insurance
• Insurance Brokerage • Insurance Underwriting • Reinsurance

Advisory Services
• Stock brokers (private client services) and discount brokers

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Constituents of Financial Service Sector
• Market participants
– Individuals, corporate entities, banks, financial institutions, mutual fund and merchant bankers.

• Financial Service Providers
– Financial institutions, banks, non-banking financial institutions, insurance, leasing and factoring companies and mutual funds.

• Regulatory Bodies
– RBI, SEBI, Department of Finance, Department of Banking and Insurance of the Central Government etc.
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Factors influencing Financial Services
i. ii. Lack of qualified personnel. Lack of investor awareness.

iii. Lack of transparency iv. Lack of specialisation v. Lack of recent data

vi. Lack of efficient risk management system

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Growth of Financial Services
• Conservatism to dynamism • Emergence of Primary Equity Market • Concept of Credit Rating • Process of Globalisation • Process of Liberalisation
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