Content

  1. Banking Services
  2. Financial services
  3. State of affairs in Global 

3.1 Scenario

3.2 Government Reforms

3.3 Benefits

  1. State of affairs in India

4.1 Scenario

4.2 Government Reforms

4.3 Benefits

Banking Services

Any activities involved in accepting and safeguarding money owned by other individuals and entities and then lending out this money in order to earn a profit  is called banking services. And therefore banking service is said to be an end-to-end process ensuring the overall implementation of a financial service. In simple, the banking industry is most concerned with direct saving and lending.  Nowadays digital banking service is available on-demand which is operated within a set time-frame.  Modern banking in India initiated in the last decade of the 18th century. Among the first banks were the Bank of Hindustan, which was established in 1770 and liquidated in 1829–32; and the General Bank of India, established in 1786 but failed in 1791.


Financial services

Financial services are the economic services provided by the finance industry, which includes a broad range of businesses that manage money, including credit unionsbankscredit-card companies, insurance companies, accountancy companies, consumer-finance companies,  stock brokeragesinvestment funds, individual managers and some government-sponsored enterprises. In simple, the financial services sector incorporates investments, insurance, the redistribution of risk, and other financial activities to earn revenue through fees, commissions, and other methods. Financial services companies are present in all economically developed geographic locations and tend to cluster in local, national, regional and international financial centers such as LondonNew York City, and Tokyo. Financial sector reforms were initiated in 1991 with the aim of accelerating economic growth.


STATE OF AFFAIRS IN GLOBAL 

Hereby find the overview of banking and financial services industry in worldwide

Scenario

Regulatory bodies are interconnected with various industries, and financial services are no exception. Independent agencies are designated to oversee different financial institutions’ operations, uphold transparency, and ensure their clients are treated fairly. The country’s life insurance sector is the biggest in the world, and the market size is expected to touch about $400 billion by 2020. The assets of the mutual fund industry are worth $190 billion. The global impact investment market is estimated to be valued at USD 135 Billion in 2015 and is expected to grow at a CAGR of 17.86 % during the forecast period to reach to USD 307 Billion by 2020.

Government Reforms

  • FINRA is the largest independent US regulator that oversees brokerage firms and exchange markets. In 2019 the FINRA launched the Office of Financial Innovation to aid communication between regulators, investors, and financial service providers. Essentially, it was set up to assist in understanding and regulating the technological advancements in the finance industry. 
  • OCC is an independent bureau within the US Department of the Treasury designed to regulate all national banks. Most recently, the OCC announced that banks cannot use the coronavirus pandemic as a means for accelerating branch closures. According to Insider Intelligence, the OCC is standing by existing rules that govern bank closures. 

Benefits

Two trends in particular that are driving this digital evolution are as follows

  • Gig Economy Workers

Technological advancement in the financial sector, institutions can conduct more thorough risk assessments, which could make serving gig workers worthwhile. Half of the US population is expected to do gig work by 2028, and financial institutions that cater to this demographic could capture a major monetization opportunity.  Digital gig work generated $204 billion in customer volume in 2018 and is expected to grow to $455 billion by 2023, according to a recent Mastercard study

  • Big Tech Companies

Big tech companies, like Apple and Amazon, could grab up to 40% of the $1.35 trillion in US financial services revenue from incumbent banks, according to an Insider Intelligence report.  Apple’s launch of the Apple Card could open doors to additional financial tools such as debit cards or PFM applications. And Amazon could bring Amazon Pay in-store which could attract merchants by saving them interchange costs, cutting into a $90 billion annual source of revenue for issuers and networks. 


STATE OF AFFAIRS IN INDIA 

Hereby find the overview of banking and financial services industry in Indian

Scenario


India has a diversified financial sector undergoing rapid expansion, both in terms of strong growth of existing financial services firms and new entities entering the market. The sector comprises commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities. Financial services show the poor ways out of poverty and of leading better lives. To the wealthy, financial services offers opportunities to make money grow. The banking supervisor has allowed new entities such as payment banks to be created recently, thereby adding to the type of entities operating in the sector. However, financial sector in India is predominantly a banking sector with commercial banks accounting for more than 64 per cent of the total assets held by the financial system.

Government Reforms

The Government of India has commenced several improvements to ease up, regulate and enhance this industry. The Government and Reserve Bank of India (RBI) have taken various measures to facilitate easy access to finance for Micro, Small and Medium Enterprises.  These measures include 

  • Beginning Credit Guarantee Fund Scheme for MSMEs,
  • Issuing guideline to banks regarding collateral requirements and
  • Setting up a Micro Units Development and Refinance Agency (MUDRA). 

India is undoubtedly one of the world’s most vibrant capital markets with a combined effort by Government and private sector.  India has scored a perfect 10 in protecting shareholders’ rights on the back of reforms implemented by Securities and Exchange Board of India (SEBI).

Benefits

  • Employment and entrepreneurship created with the help of the services enable people to earn and save.
  • Shows the poor ways out of poverty and of leading better lives. 
  • To the wealthy, financial services offers opportunities to make money grow.
  • In 2017, a new portal named ‘Udyami Mitra’ was launched by Small Industries Development Bank of India (SIDBI) with an aim to improve credit availability to MSMEs in the country.
  • In November 2019, Government allocated Rs 10,000 crore to set up AIFs for revival of stalled housing projects.
  • Bombay Stock Exchange (BSE) introduced weekly futures and options contracts on Sensex 50 index from October 26, 2018.

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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