Providing financial services enables financial institutions to raise finance and disburse it in the best way possible. Such services include factoring, mutual funds, credit cards, and hire purchase finance. These services help the financial institutions expand their activities and diversify their uses of funds, thereby ensuring economic dynamism. These services are provided by many different types of financial institutions, such as banks, insurance companies, and brokerages. They provide financing for a variety of different purposes, such as business expansion and investment.
Regulatory environment for financial services is a key element of financial sector regulation. It includes laws and rules to prevent misconduct in the financial sector, including the enforcement of those laws. These laws are designed to deter misconduct by levying significant financial penalties and remuneration adjustments. Furthermore, it seeks to minimise the impact of financial service regulations on the economy. Regulatory environment for financial services firms includes three main areas of concern:
Over the past decade, the business model of financial services has undergone a radical change, transforming the way consumers access and manage their finances. Traditional banking has become invisible, incorporated into non-financial applications. Social media and crowdfunding are redefining the role of traditional banks and financial services. In the future, financial services companies will become embedded in consumers’ financial relationships, no matter where they operate. However, a key element of the future business model will remain the same: data.
Compared with physical goods, financial services cannot be stocked or pegged to inflation or the CBN tariff. They cannot be manufactured, resold, or stored and, as such, are not subject to inventory management. Financial services also have very complex and personalized marketing, as they depend on climatic factors, rather than being based on commodity price. To ensure success, financial services firms need to develop innovative strategies and apply modern technology in their marketing.
The number of professionals entering the job market increased in October, according to Morgan McKinley and Astbury Marsden. Both firms say the rise was driven by bankers who are “window shopping” for rivals. This trend may continue as the MF Global bankruptcy puts pressure on banks and financial institutions. Those seeking employment in financial services should consider alternative career paths and consider these trends. The report highlights the growing importance of education for financial services professionals.
The digital revolution is changing the way financial services operate. The rise of AI and other artificial intelligence technologies is already making a huge impact on the field, and more traditional firms are following suit. The biggest concern among executives in the sector is the chasm between perceptions and reality. Traditional banks, for example, have begun looking at fintech startups, such as Goldman Sachs, and recently launched Marcus, a consumer lending platform. However, according to tech-savvy industry watchers, these banks will need to radically change their corporate structures to compete with these companies.