FINACIAL SERVICES

BY
MINISHA GUPTA
LECTURER (FINANCE) 1
 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 Investment Advisory

Insurance
Bank Services Services

• Private • Asset • Insurance • Stock brokers

banking Management Brokerage (private client
services) and
• Investment • Hedge Fund • Insurance
discount
Banks Managers Underwriting
brokers
• Bank cards • Custody • Reinsurance
services
• Credit card
machine
services and
networks

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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. Lack of qualified personnel.

ii. Lack of investor awareness.

iii. Lack of transparency

iv. Lack of specialisation

v. Lack of recent data

vi. Lack of efficient risk management

system 8
 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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