Financial services are economic services such as savings accounts, checking accounts, lending, leasing, factoring, and money transfers, generally provided by banks, credit unions, and finance companies.
Place and importance in the global economy:
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Financial services are an increasingly influential sector of the modern economy.
The OECD suggests that financial services typically make up 20-30% of total service market revenue and about 20% of the total gross domestic product in developed economies.
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If the OECD's suggestion that financial services account for 20% to 30% of the total service market is accurate, then financial services would comprise between 12% and 19.5% of the total global economy.
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Customers who were previously served by local financial institutions are now being targeted on a global scale.
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Within globalization, the survival and success of many financial service firms depend on understanding and meeting the needs, desires, and expectations of their customers.
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One of the primary driving forces for the geographic diversification of financial service firms has been the proliferation of corporate combination strategies such as mergers, acquisitions, strategic alliances, and outsourcing.
Key trends for the industry:
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Financial institutions must prioritize becoming more customer-centric in terms of competition density.
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Rapidly evolving, sophisticated, and complex technologies, cross-border data exchanges, and the use of third-party vendors make cybersecurity one of the top risks facing financial institutions.
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Asia is emerging as a key center of technology-driven innovation in the industry.
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Companies are offering a seamless omnichannel experience, through a smart balance of human capital and technology.
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The financial services industry is one of the sectors most impacted by digital transformation
Key technologies for the industry include digital banking, mobile payments, blockchain, big data, and AI and robotics. Major companies in the industry are JPMorgan Chase (US), Visa (US), Mastercard (US), and ICBC (China).
