meaning,types of financial activities and significance of financial services.

1. PRESENTED BY:
JANAK SECKTOO
MBA(MARKETING)4TH SEM.
BUEST

2. In general, all types of activities, which are of a
financial nature could be brought under the term
'financial services'. The term financial services'
in a broad, sense means "mobilizing and
allocating savings". Thus it includes all
activities involved in the transformation of
savings into investment.

3. financial services can also be called 'financial inter
mediation'. Financial intermediation is a process by
which funds are mobilizing from a large number of
savers and make them available to all those who are
in need of it and particularly to , corporate
customers. thus, financial services sector is a key
area and it is very vital for industrial
developments. A well developed financial services
industry is absolutely necessary to mobilize the
savings and to allocate them to various invest able
channels and thereby to promote industrial
development in a country.

4.  Customer-Specific: Financial services are usually
customer focused. The firms providing these services,
study the needs of their customers in detail before
deciding their financial strategy, giving due regard to
costs, liquidity and maturity considerations. Financial
services firms continuously remain in touch with their
customers, so that they can design products which can
cater to the specific needs of their customers. The
providers of financial services constantly carry out
market surveys, so they can offer new products much
ahead of need and impending legislation. Newer
technologies are being used to introduce innovative,
customer friendly products and services which clearly
indicate that the concentration of the providers of
financial services is on generating firm/customer specific
services.

5.  Intangibility: In a highly competitive global environment
brand image is very crucial. Unless the financial institutions
providing financial products and services have good image,
enjoying the confidence of their clients, they may not be
successful. Thus institutions have to focus on the quality and
innovativeness of their services to build up their credibility.
 Concomitant: Production of financial services and supply of
these services have to be concomitant. Both these functions i.e.
production of new and innovative financial services and
supplying of these services are to be performed
simultaneously.
 Tendency to Perish: Unlike any other service, financial
services do tend to perish and hence cannot be stored. They
have to be supplied as required by the customers. Hence
financial institutions have to ensure a proper synchronization
of demand and supply.

6.  People Based Services: Marketing of financial services has
to be people intensive and hence it’s subjected to variability
of performance or quality of service. The personnel in
financial services organisation need to be selected on the
basis of their suitability and trained properly, so that they
can perform their activities efficiently and effectively.
 Market Dynamics: The market dynamics depends to a great
extent, on socioeconomic changes such as disposable
income, standard of living and educational changes related
to the various classes of customers. Therefore financial
services have to be constantly redefined and refined taking
into consideration the market dynamics. The institutions
providing financial services, while evolving new services
could be proactive in visualizing in advance what the
market wants, or being reactive to the needs and wants of
their customers.

7.  Fund based activities.
 Non-fund based activities.
 Modern Activities

8.  Fund based activities: The traditional services which
come under fund based activities are the following:
 Underwriting or investment in shares, debentures,
bonds, etc. of new issues (primary market
activities).
 Dealing in secondary market activities.
 Participating in money market instruments like
commercial papers, certificate of deposits, treasury
bills, discounting of bills etc.
 Involving in equipment leasing, hire purchase,
venture capital, seed capital etc.
 Dealing in foreign exchange market activities. Non
fund based activities

9.  Non fund based activities: Financial intermediaries
provide services on the basis of non-fund activities also.
This can be called ‘fee based’ activity. Today customers,
whether individual or corporate, are not satisfied with
mere provisions of finance. They expect more from
financial services companies. Hence a wide variety of
services, are being provided under this head. They
include:
 Managing the capital issue i.e. management of pre-issue
and post-issue activities relating to the capital issue in
accordance with the SEBI guidelines and thus enabling
the promoters to market their issue.
 Making arrangements for the placement of capital and
debt instruments with investment institutions.
 Arrangement of funds from financial institutions for the
clients project cost or his working capital requirements.
 Assisting in the process of getting all Government and
other clearances

10.  .
 Beside the above traditional services, the financial
intermediaries render innumerable services in recent
times. Most of them are in the nature of non-fund based
activity. In view of the importance, these activities have
been in brief under the head ‘New financial products
and services’. However, some of the modern services
provided by them are given in brief here under.
 Rendering project advisory services right from the
preparation of the project report till the raising of funds
for starting the project with necessary Government
approvals.
 Planning for M&A and assisting for their smooth carry
out.
 Guiding corporate customers in capital restructuring.

11.  Acting as trustees to the debenture holders.
 Recommending suitable changes in the management structure
and management style with a view to achieving better results.
 Structuring the financial collaborations/joint ventures by
identifying suitable joint venture partners and preparing joint
venture agreements.
 Rehabilitating and restructuring sick companies through
appropriate scheme of reconstruction and facilitating the
implementation of the scheme.
 Hedging of risks due to exchange rate risk, interest rate risk,
economic risk, and political risk by using swaps and other
derivative products.
 Managing in-portfolio of large Public Sector Corporations.
 Undertaking risk management services like insurance
services, buy-back options etc.
 Advising the clients on the questions of selecting the best
source of funds taking into consideration the quantum of
funds required, their cost, lending period etc.

12.  Guiding the clients in the minimization of the
cost of debt and in the determination of the
optimum debt-equity mix.
 Promoting credit rating agencies for the
purpose of rating companies which want to go
public by the issue of debt instrument.
 Undertaking services relating to the capital
market, such as 1)Clearing services,
2)Registration and transfers, 3)Safe custody of
securities, 4)Collection of income on securities.

14.  channelizing the funds for economic growth
and development of a country.
 Implementing monetary and debt management
policies of the government.

15.  Financial services from and major part of the
gross domestic product.
 It ensures there is no shortage of funds for
productive venture.
 It reduces cost of transaction and borrowing by
providing adequate financial structure and
system.
 It generates employment.

16. THANK YOU………………………………