Financial Services
Gargi Parte 15256
Chinmay Bavare 15257
Tejas Wagh 15258
Hitesh Kanjan 15259
History
Until 1970s: The financial services industry consisted of a few well-defined and separate
industries that dealt in money. Eg: Merrill Lynch for investment in stocks, VISA or Mastercard for
consumer credit, various brokerage and mortgage houses.
The Decline of Banks (1970-1990): Beginning in the 1970s, the profitability of banks declined
due in large part to federal regulations that restricted banks from offering the variety of
products, such as insurance, mutual funds, and stocks. There were approximately 1,295 bank
failures between 1985 and 1992 due to increased prices by OPEC countries which led to double
digit inflation.
The Diversification of the Financial Services Industry(Mid 1990s): Various investment banks and
other big companies offered loans to businesses and credit to consumers, all financial services
previously reserved for banks and savings and loans. By 1995, Americans faced a bewildering
array of choices for even the most routine financial transactions. Credit cards became
increasingly popular, with $480 billion in purchases made in 1993 alone.
History
Industry Convergence (Late 1990s): The convergence of companies offering financial services has blurred
the conventional boundaries that once separated banks, brokerages, and insurance companies. Example:
in April 1998 with the announcement of the merger of Citicorp and Travelers Insurance.
Turbulent Times:
1. One of the defining moments in the financial services industry came during the 1980s with the failure of hundreds of savings
and loan (S&L) institutions which was caused due to debt burden that the S&Ls carried as the result of offering low-interest
mortgages
2. On 19 October 1987(Black Monday), the New York Stock Exchange experienced the largest single-day drop in its history,
losing 508.32 points, or 22.6 percent of its value due to introduction of computerized trading.
Sub-Prime Crisis: subprime mortgage crisis was a nationwide banking emergency that coincided with the
U.S. recession of December 2007 – June 2009.It was triggered by a large decline in home prices after the
collapse of a housing bubble, leading to mortgage delinquencies and foreclosures and the devaluation of
housing-related securities which eventually resulted in The Great Recession.
Major Players in Indian Market
1. SBI Capital Markets Limited: This happens to be the oldest organizations in the sphere of capital markets in India.
Established in 1986 in the form of an ancillary of SBI, they have ranked second in Asia's Project Advisory services. The
company is a trailblazer in privatization and securitization.
2. Bajaj Capital Limited: One of the major financial services companies in India, Bajaj Capital offers best investment
advisory and financial planning services. The services are meted out to the institutional investors, NRIs, corporate houses,
individual investors, high network clients as well.
3. DSP Merrill Lynch Limited: A major player in the equity and debt market in India, DSP Merrill Lynch offers financial
advises to varied corporations and institutions. With an array of wealth management and investor services, their services
are customized in a manner that they meet every investor requirement
4. Birla Global Finance Limited: The subsidiary of Aditya Birla Nuvo Ltd., this company has operations in the corporate
finance and capital market arena. An alliance with Sun Life Financial of Canada, they have given birth to Birla Sun Life
Insurance Co Ltd., Birla Sun Life Distribution Co. and alike
5. Housing Development Finance Corporation: A best financial solution for home loans, NRI loans, HDFC is the one stop
destination for personal finance. With overseas branches in Singapore, Kuwait, Qatar, Saudi Arabia and many others,
HDFC has been going great guns every year
6. ICICI Group: Wide arena of financial products and services, ICICI Group has solutions like InstaBanking, Online Trading,
Insta Insure, ICICI Bank imobile etc. Providing high class financial services in all segments of the society, ICICI Group deals
with Mutual Fund, Private Equity, Securities, and Life Insurance etc.
Major Players in Global Market
1. Berkshire Hathaway (Revenue 162.5Bn): According to the Forbes Global 2000 list and formula, Berkshire Hathaway is the
fifth largest public company in the world. The company is known for its control and leadership by Warren Buffett, who is
the company's Chairman of the Board, President, and Chief Executive Officer.
2. AXA (Revenue: 147.5Bn): AXA is a French multinational insurance firm headquartered in the 8th arrondissement of Paris
that engages in global insurance, investment management, and other financial services.
3. Allianz (Revenue: 140.3Bn): Allianz is a European financial services company headquartered in Munich, Germany. Its core
businesses are insurance and asset management. As of 2014, it is the world's largest insurance company, the largest
financial services group and the largest company according to a composite measure by Forbes magazine.
4. ICBC (Revenue: 134.8Bn): Industrial and Commercial Bank of China Ltd. is a Chinese multinational banking company, and
the largest bank in the world by total assets and by market capitalization.
5. Fannie Mae (Revenue: 131.9Bn): The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae,
was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise (GSE)
and has been a publicly traded company since 1968.
6. ING (Revenue: 126.2Bn): The ING Group is a Dutch multinational banking and financial services corporation
headquartered in Amsterdam. Its primary businesses are retail banking, direct banking, commercial banking, investment
banking, asset management, and insurance services. ING is an abbreviation for International Netherland Group
7. Other Players: BNP Paribas, JP Morgan Chase, CitiGroup, HSBC, Wells Fargo, Generali Group, etc.
Current Trends
Mobile wallets
Future Trends
Payment Banks
For low income group
Limit of the account- 1 Lakh
Objective – To make it easier to open an account.
Hashtag Banking
Allows you to do a lot with a simple tweet
Instant and secure update on your account balance.
Helps to recharge your pre-paid mobile and DTH account.
Digital Money (Bitcoin)
• Pseudonymous
• No transaction cost
• Peer to Peer
• Privacy due to cryptography
• Not Legal in all areas
