The basic functions, characteristics, components and revenue sources of financial services are discussed in this article. If you’re looking for more information on the sector, check out the following sections:
The basic functions of financial services are to manage resources and provide information that helps coordinate decentralized decision-making processes throughout an economy. A financial system provides this information, as well as the means to trade financial assets. For instance, securities prices and interest rates help consumers and companies make decisions about whether to save or spend their money. These price-information systems also allow institutions and households to pool their risks and share the burden of accidents and difficulties. These services also help companies and households make decisions on their portfolio allocations.
The range of financial services provided by financial intermediaries plays a key role in the orderly development of an economy. Financial services are required for reallocation of savings and investments and facilitate the conversion of financial assets into liquid cash. The industry provides employment for millions of people by providing services that enable consumers to save for the future, hedge against risks and acquire capital for consumption and investment. Financial services are also responsible for the mobilization of funds from various sources, including individuals, institutions and corporate entities, through a variety of financial instruments.
As the need for financial services is growing, providers must be prepared to provide these services from anywhere. As the financial services industry continues to evolve, the complexity of computer systems is bound to increase. As a result, banks are exploring ways to provide access to their bank books on devices other than personal computers, including personal data assistants and screen phones. They are also contemplating ways to connect to these books over the internet, using either external service providers or an Internet service provider.
There are several revenue sources for financial services. Generally, operating revenue is derived from sales of the core business. Other forms of revenue, such as transaction-based or service revenue, fluctuate with customer demand. Seasonality can also affect the amount of revenue generated. Project revenue, on the other hand, is dependent on long-term relationships with customers and can be highly unpredictable. In this article, we’ll explore some of the most common revenue sources for financial services.
In financial services, employees are often grouped according to their duties, rather than by the type of customer they serve. These employees typically perform a variety of tasks. The duties of financial services employees generally fall into three general categories. They may serve customers directly, or they may be aimed at an end user. In either case, the role of a financial services employee can be both creative and rewarding. The following are just a few of these job functions.