The document discusses financial services and provides details on various types of financial services like banking, insurance, mutual funds, and financial consultancy. It outlines the functions of these services and discusses advantages of the growing financial services industry in India like its strong regulatory framework, high savings rate, favorable demographics and fast growing economy. The financial services sector in India is growing at 15% annually and its contribution to the country's GDP is rising.

1. Presentation
On
Financial services
Submitted to: Submitted by:
Prof Vipin choudhary Shahista Qureshi
Aakanksha Pandey

2. Financial services
 Financial services can be defined as the products and services
offered by institutions like banks of various kinds for the
facilitation of various financial transactions and other related
activities in the world of finance like loans, insurance, credit
cards, investment opportunities and money management as well
as providing information on the stock market and other issues
like market trends
 Financial services refer to services provided by the finance
industry. 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 government sponsored enterprises.
 Functions of financial services

3. Types of financial services
 Banking services
 Insurance services
 Mutual fund services
 Financial consultancy services

4. Continued…
 Banking services
In general terms, the business activity of accepting and
safeguarding money owned by other individuals and entities,
and then lending out this money in order to earn a profit.
 Insurance services
Insurance is a form of risk management primarily used
to hedge against the risk of a contingent, uncertain loss.
Insurance is defined as the equitable transfer of the risk of a
loss, from one entity to another, in exchange for payment. An
insurer, or insurance carrier, is a company selling the insurance;
the insured, or policyholder, is the person or entity buying the
insurance policy. The amount to be charged for a certain
amount of insurance coverage is called the premium.

5. Continued…
 Mutual funds
A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal. The money thus
collected is then invested in capital market instruments such as
shares, debentures and other securities. The income earned
through these investments and the capital appreciations realized
are shared by its unit holders in proportion to the number of
units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to
invest in a diversified, professionally managed basket of
securities at a relatively low cost.

6. Continued…
 Financial consultancy services
A financial consultants is a professional who helps clients
to maintain the desired balance of investment income,
capital gains, and acceptable level of risk by using
proper asset allocation. Financial advisers
use stock, bonds, mutual funds, real estate investment
trusts (REITs), options, futures, notes,
and insurance products to meet the needs of their clients.
Many financial advisers receive a commission payment
for the various financial products that they broker,
although "fee-based" planning is becoming increasingly
popular in the financial services industry.

7. Marketing strategy of financial
services
Advertisement Networking
 Television
 Newspaper
 Hoardings
 Pamphlet
 Online availability
 Email
 Ex. Financial planners
 Networking is also known as
MLM (multi level marketing)
Most commonly, the
salespeople are expected to sell
products directly to consumers
by means of relationship
referrals and word of mouth
marketing.
 Ex. Insurance policy

8. Challenges in financial services

9. Continued…
 Industry consolidation
The level of concentration, consolidation, and merger
within the industry has grown significantly. For example,
in the credit card business a total of 5banks account for
over 60% of all credit card lending that takes place in the
United State. The top ten commercial banks control over
half of the industry’s assets.
 New entrants
The traditional boundaries of financial services marketing
are being challenged by the emergence of new competitors
from both within and outside of the financial services
sector. For example, in 2004, Volkswagen began to provide
home equity loans to the public.4 Customers who use
Volkswagen’s home equity lines would gain credit towards
the purchase of a new Volkswagen.

10. Continued…
 Fragmenting consumer base
There is also mounting evidence that financial
services markets are challenged by a consumer base
that is becoming highly fragmented. For example,
despite the fact that the banking industry in the
United States has been functioning in one form or
another for centuries, there are approximately 10
million American households today who have no bank
account.5 Furthermore, the average consumer has over
$10,000 in non-mortgage debt.

11. Continued…
 Consumer trust
Securing a sense of mutual trust between the consumer
and the financial institution has at times been a challenge
in financial services markets. Distrust affects both the
consumer and the company, as both may feel uncertain
about the underlying intentions of the other party. For
example, a recent consumer survey shows that one in every
four consumers will not hesitate to cheat their insurance
company, if they have a chance to do so . These consumers
may, for example, choose to misinform their insurance
company about their individual risk characteristics when
signing up for an insurance policy, misrepresent the
sequence of events that lead them to file a claim, or even
neglect to disclose relevant information that may invalidate
the insurance policy

12. Advantages of financial services
Modern
technology
Favorable
demographic
profile
Strong
regulatory
framework
High saving
rate
Fast growing
economy in
the world
Tremendous
growth
potential

13. Continued…
 Modern technology
Availability of modern infrastructure and technology,
i.e., electronic transfer, T+2 settlement,
dematerialization of securities, rolling settlements,
etc.
 Favorable demographic profile
India has a favorable demographic profile with a large
segment of the population under 30 years.

14. Continued…
 Strong regulatory framework
India has a strong financial regulatory system,
administered by Reserve Bank of India (RBI) and
supported by regulatory body such as Securities and
Exchange Board of India (SEBI), which govern capital
markets and mutual funds, among other financial
institutions.
 High saving rate
India’s high savings rate offers significant opportunity
to channelize resources into the financial markets. RBI
projects India’s gross domestic savings to be 34 per
cent in FY11, which is likely to increase to 35.3 per cent
by FY12.

15. Continued…
 Fast growing economy in the world
India is among the fastest-growing economies in the
world, with a real GDP growth rate of 7.4 per cent in
2009–2010.
 Tremendous growth potential
The Indian financial market is growing rapidly, with
significant potential for further growth.
( NSE is ranked 17th in terms of value of shares traded
in the world during 2010 till October end)

16. Growth rate of service industry
 India remains among the fastest growing economies of
the world. Country’s sovereign credit rating rose by a
substantial 2.98 percent in 2007-12.
 Services sectors continue to perform well.
 Services sector grows by 9.4 %, its share in GDP goes
up to 59%.
 Growth rate of financial services is 15%.