Financial services are processes through which businesses and consumers obtain financial goods and services. They turn savings into investment, but are intangible in nature. IT systems help make these processes possible. Here are some examples of services. Listed below are some of the major services. You can also see the full list of all financial services. The following sections will give you a quick overview of these services. Hopefully, this information will help you make the right decision for your business.
Financial services are the processes by which consumers or businesses acquire financial goods
A mortgage loan might seem like a service, but it’s actually a product. Other financial goods include stocks, bonds, loans, and commodity assets, such as real estate and insurance policies. The financial services industry is the backbone of a nation’s economy, providing the free flow of capital and liquidity in the marketplace. In turn, this helps grow the economy and manage risk. However, it is not without its pitfalls.
They transform savings into investment
Financial services transform savings into investment by helping people acquire consumer goods. These services generate profits for the financial institutions by encouraging investment, production, and saving. Financial services help consumers grow their money through investment, creating more demand for goods. They also help producers obtain the capital they need to meet increased demand. However, not everyone can afford the services offered by financial institutions. To avoid being left behind, financial services are important. Here are a few of their benefits.
They are intangible in nature
Most of the services we use on a daily basis are intangible in nature. The first time we interact with a client, they are generated by the intangible attributes they associate with that person. These attributes increase as we get to know them better. As time passes, they decrease and, eventually, they reach zero. This point is reached when the client has enough skills to operate within the traditional banking system, usually around the 10th cycle of credit. As the financial system becomes more mature, the users become more experienced and generate new intangible attributes.
They depend on IT systems
In today’s increasingly digital world, financial services are becoming reliant on IT systems to function effectively. Although financial services relied on paper-based systems for many years, the use of advanced technologies is now more prevalent. While financial services will never go back to manual systems, the increased reliance on technology has created new vulnerabilities for the industry. Here are four major reasons why financial services rely on IT systems. Let’s examine each one in turn.
They are customer-centric
Taking a customer-centric approach is critical for financial services brands. Today, the customer is the profit centre, so they have a choice over how much they spend and buy from a brand. While big players may be able to rely on inertia to deliver an endless payday, today, there are few barriers to switching to a new fintech provider. Monzo is one such example. Monzo has over two million customers, and 30% of them use it as their primary bank account.