Financial and Business Services
Financial services are literally any service provided by a company in the financial industry. It also describes merchant banks, stock brokerage firms, credit card companies, consumer finance organizations, and government-sponsored enterprises. It is the largest worldwide industry.
The financial services we know best is banking
Most people know banks better than other financial services organizations. They are where we keep our money, the people who hold our mortgages and grant our loans. In many cases, they also issue our credit cards. Most of all, they issue our checking and savings accounts. The banks we know best are actually commercial banks as opposed to investment banks that are financial services entities that help business raise money from other firms in the form of bonds (debt) or stocks (equity). Of the top ten worldwide banks, three are in the US, two in the UK, two in China, and one each in France, Japan and Spain. Private banks are generally divisions of financial services companies targeted to serve wealthy individuals. Finally, there are capital market banks that underwrite debt and equity, assist companies in deals and restructure debt into structured finance products.
There are many other important financial services businesses
In addition to banking which is the number one category in the financial services arena, there are many other important areas. The next highest business under financial services is Insurance, followed by Mortgages, Accounting and Venture Capital. There are at least fifty smaller categories as well.
Today, many financial services organizations outsource their needs
The successful companies of the future will operate lean and mean in order to control overhead and costs in highly competitive marketplaces. To achieve this, many organizations are trimming their staff rosters and utilizing outsource suppliers on a project basis. These are both small groups and individuals who now freelance their expertise to buyers who need them on the Internet. Some of the categories where outsourcing is providing opportunities include Accounting, Appraisal & Valuation, Financial Counseling, Education and Training, Marketing & Advertising, Payroll Services, Tax Preparation and Financial Planning. There are websites online where both outsource buyers of Services can place available projects and freelance or individual contractors can bid on them.
Financial services organizations face many challenges
Companies that function under the umbrella of financial services must continually strive for ambitious growth and profit against a background of heightened market pressures, regulation and risks. The winners will be those firms that can convert challenges into opportunities to build stronger and longer lasting customer relationships, hone process efficiency, open new talent and creativity utilize improved risk management processes to obtain more sustainable returns, and embrace new regulatory demands to strengthen their businesses and increase market confidence. Therefore, the primary financial services challenges will be governance & risk management; growth; human capital; mergers & acquisitions; market reporting and regulation and compliance.
