Financial Services: Functions, Characteristics, and Scope
Learn about the various aspects of financial services, including functions like fund mobilization and risk transfer, characteristics such as intangibility and variability, constituents like financial assets and instruments, traditional and modern activities, and the importance of financial services in economic growth and development.
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Presentation Transcript
INTRODUCTION TO FINANCIAL SERVICES Financial services can be defined as activities, benefits and satisfactions, connected with the sale of money, that offer to users and customers financial- related value.
FUNCTIONS Mobilization of fund. Transfering Risk. Facilitating transactions in the economy. Allocating Capital Funds. Enhancement of economical development.
Characteristics of Financial services Dominance of human element. Information based Inseparability Intangibility Perishability Variability
CONSTITUENTS Financial Assest. Financial Market. Financial Instruments. Financial Institution.
SCOPE OF FINANCIAL SERVICES Financial services cover a wide range of activities.They can be broadly classified into two: Traditional Activities Modern activities.
TRADITIONAL ACTIVITIES Traditionally, the financial intermediaries have been rendering a wide range of services encompassing both capital and money market activities. They can be grouped under two heads, viz: Fund based activities Non-fund based activities
MODERN ACTIVITIES Beside the above traditional services, the financial intermediaries render inumerable services. Most of them are in the nature of non-fund based activities. In view of the importance, these activities have been of the importance, in brief under the head 'New financial products and services .
CLASSIFICATION OF FINANCIAL SERVICES Banks no longer limit their services to traditional services, but provide a wide range of financial services. These financial services can be classified into two groups on the basis of movement of funds namely: Fund-based activities Non Fund based activities
IMPORTANCE Maximising the return. Economic Growth. Promoting Savings. Economic Development. Capital Formation. Employment Opportunities.
Agencies Providing Financial Services MERCHANT BANKING LEASING HIRE PURCHASE MUTUAL FUNDS. FACTORING. FORFEITING.
Derivative security Securitization of debt Forward contract Options Futures Swaps Credit rating Venture capital. Custodial services. Corporate advisory services
CHALLENGES Investor Awareness. Transperancy. Risk Management System. Cyber Security. Competitive Market. Enterprise Level Integration. Restoration of Public Confidence.
