Easy and understandable to yourself

1. Financial Services
Submitted To:- Submitted By:-
Mrs. Alka Sood Dheeraj Sharma
(Asst. Prof) 18PBA015
MBA 4th Sem

2. Introduction of Financial Services
• Financial Services refer to services provided by the finance industry.
• Services that are financial in nature.
• The finance industry encompasses a broad range of organizations that deal
with the management of money.
• Among these organizations are banks, credit card companies, insurance
companies, consumer finance companies, stock brokerages, investment
funds and some govt sponsored enterprises.

3. Nature of Financial Services
• Financial services involve at least two people or firms, the service provider
and the user.
• Financial institution intermediate the flow of funds between different
economic decision-making units.
• The financial services are intangible.
• Financial services is an innovative activity and requires dynamism.

4. Scope of Financial Services
The following scope of financial services, and cover a wide range of
activities. They are can broadly classify into two, namely:
Traditional Activities
Modern Activities

5. Traditional Activities
The financial intermediaries have been rendering a wide range of services
encompassing both capital and money market activities. They can group
under two heads, viz.
• Fund based activities and
• Non-fund based activities

6. Modern Activities
Besides the above traditional services, the financial intermediaries render
innumerable services in recent times. Most of them are like the non-fund
based activities. Because of the importance, these activities have been in
brief under the head “New-financial-products-and-services”. However, some
of the modern services provided by them are given in brief hereunder.
• Planning for M&A and assisting with their smooth carry out.
• Guiding corporate customers in capital restructuring.
• Acting as trustees to the debenture holders.

7. Types of Financial Services
• Fund or asset based financial services
• Fee based financial services

8. Fund or asset based financial services
It refers to services that are used to acquire assets or funds for a customer. It
consists of-
o Primary market activities
o Secondary market activities
o Foreign exchange activities
o Specialized financial services
Important fund based services include
• Leasing
• Hire purchase
• Factoring

9. • Mutual fund
• Bill discounting
• Credit financing
• Housing finance
• Venture capital

10. Fee based financial services
When financial institutions operate in specialised fields to earn income in
form of fees, commission, brokerage or dividends it is called a fee based
service. They include-
• Issue management
• Portfolio management
• Corporate counselling
• Credit rating
• Stock broking
• Bank guarantee

11. Financial Regulation
Financial regulation is a form of regulation or supervision, which subjects
financial institutions to certain requirements, restrictions and guidelines,
aiming to maintain the integrity of the financial system. This may be handled
by either a government or non-government organization.

12. Need for regulation of financial markets
Market failure;
When the market pricing mechanism is incapable of maintaining all the
requirements of a competitive, efficient markets. Regulation restricts
financial institution activities in the vital areas of lending, borrowing and
funding.
Purpose of regulation:-
• It controls the level of economic activity.
• It promotes competition and fairness in trading.
• It promotes the stability of financial institution.
• It prevents issuers of the securities from defrauding investors.

13. Thank You