What Are Financial Services?
The financial services industry is a large and influential sector of the economy. It encompasses a wide range of industries and business processes, including banking, credit cards, payments, investments, insurance, and more. The sector has many different stakeholders and moving parts, from major banks to startup challengers. With increasing consumer demand for digital services, established and new players alike are stepping up their game.
What are financial services?
The finance industry is the group of companies and institutions that manage money. It is an essential part of a nation’s economy, providing the necessary infrastructure for citizens to interact with the global financial system. The finance industry is composed of three broad areas: personal finance, corporate finance, and government finance. Personal finance focuses on the financial activities of individuals, which can include spending and saving money. It also includes investing and borrowing. Corporate finance deals with the financial activities of corporations and governments. This includes the provision of capital, debt management, and investment advice. Government finance relates to the management and regulation of the fiscal activities of the government.
In addition to these main categories, there are numerous subsectors that make up the financial services industry. Banks, for example, are responsible for the collection and pooling of savings from individual depositors and then lending it to those who need it. This is a form of risk sharing and redistribution that helps stabilize the economy by reducing the reliance on informal channels of credit.
Other subsectors of financial services include brokerage, capital markets, and insurance. These sectors all play a crucial role in the economic growth of a country. Brokerage services, for example, allow individuals to purchase and sell securities on the stock market. Capital markets, on the other hand, provide a way for companies to raise capital through issuing shares. Insurance is another important aspect of the financial services industry, as it protects consumers against unforeseen events and other liabilities.
One of the biggest challenges facing the finance industry is how to increase access to financial services for those in need. Many people around the world don’t have access to banking and other formal financial services, which limits their ability to save and invest. The good news is that emerging technologies are helping to address this issue by making it easier than ever for people to use financial services.
As the global financial services industry grows and becomes more digitized, it’s vital that businesses focus on creating an exceptional customer experience. To do this, they need to leverage data analytics and AI, and adopt a customer-centric culture. Infosys BPM provides the key technology that financial services enterprises need to deliver a seamless customer experience, including retail banking, mortgages and consumer finance, cards and payments, commercial and business banking, AML and KYC, investment banking, and wealth management. For more information, contact us today. Infosys can help you streamline your processes and improve efficiency across your entire organization. Download our free e-book for more details.