management control system in financial services organizations, and type of financial services provided by these organizations

1. Presentation on Financial
Services Organizations
Presented by:
Kirti Gupta

2. Financial Service Organizations
Financial Service organizations include commercial bank
and thrift institutions, insurance companies, and securities
firms. These companies are in business primarily to
manage money. Some act as a intermediaries; that is , they
obtain money from depositors and lend it to individuals or
companies. Others act as risk shifters; they obtain money
in the form of premiums ,invest these premiums, and
accept the risk of the occurrence of specific events, such
as death damages to property.

3. Financial
Services
Organization
Commercial Banking
Investment Banking
Retail Brokerage
Insurance

4. Financial Services
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 insurance, loans, credit cards,
investment opportunities and money management as well
as providing information on the stock market and other
issues like market trends.

5. Types of Financial Services
1. Fund or Asset Based Financial Services
2. Fee Based Financial Services

6. Fund Based financial Services
The firm raises funds through, debt, equity, deposits and the
bank invests the funds in securities or lends to those who are
in need of capital. The following are some of these fund-based
services:
Leasing and Hire purchase
Housing finance
Credit cards
Venture capital
Factoring
Forfeiting

7. Fee Based Services
The services wherein financial institutions operate in
specialized fields to earn a substantial income in the form
of fees or dividends or brokerage on operations. The major
fee based financial services are as follows:
Issue management
Corporate Advisory services
Credit rating
Mutual funds

8. Special Characteristics of financial
Services Industry
Monetary Assets: Most of the assets of financial
service firms are monetary. The current value of
monetary assets is much more easily measured than
the value of plant and other physical assets, or patents
and other intangible assets. Firms that handle financial
assets, especially money, must take strong measures to
protect them. These involve not only physical
measures to safeguard currency and documents, but
also measures designed to maintain the integrity of the
system for transferring money from one party to
another.

9. Time Period For Transactions: The ultimate financial
success or failure of a bond issue, a mortgage loan to an
individual, or a life insurance policy may not be known for
30 years or more. During this period, the soundness of
the loan or policy may change, and the purchasing power
of money will certainly change. This means that the
ultimate performance of those involved in authorizing
and structuring the loan, or in selling and pricing the
insurance policy, cannot be measured at the time the
initial decision is made.

10. Risk And Reward: Many financial services firms are in
the business of accepting risks in return for rewards. Most
business decisions involve a trade-off between risks and
rewards. The greater the risk, the greater should be the
reward. In financial services firms, this trade-off is more
explicit than in business investments such as those
involving the purchase of machine or introduction of a
new product.
Technology: Technology has revolutionized the financial
services industry. Financial service firms have used
information technology as a way to offer innovative
services. Automated teller machines of banks are just one
example.

11. Management Control System
An effective management control system is the glue that
will hold the organization together and makes it more
effective with the changes in organization structure and
with the changes in the environment
Financial sector industry which comprises of banking and
non-banking finance companies, which develops and
grows on service motive, which strongly different from
manufacturing sector.

12. Management control system in
State Bank Of India
The organisational structure of state bank of india consists
of three control centres: Corporate control, management
control, operational control levels with its central office at
the apex, controlling thirteen local head offices which in
turn control zonal office, which supervise 8691 branches
on the domestic front and 47 foreign branches at overseas
front as directly supervised and controlled by central
office.

13. Responsibility centers
Top management
chairman
managing Directors
Circle management
chief general managers
general managers
Zonal management
deputy general managers
Assistant general managers
Control
Corporate control
Management control
Operational control

14. Thank You