Financial services encompass a wide variety of businesses that provide economic services to their customers. These businesses range from credit-card companies to banks and credit unions. In this article we will cover the various elements that make up the financial services industry and examine the importance of brand image. In addition, we’ll look at the growth of fintechs.
Economic power of financial services
Financial services provide an important function in an economy. Without them, people would have trouble finding people to lend them money and buying many goods. But financial services also allow consumers to put their money to productive use. They can give their savings to financial intermediaries who invest the money in new technology or make loans to buy houses. Although the mechanisms for these intermediated flows can be complicated, most countries rely on regulations to protect borrowers and maintain trust.
Digital finance can make formal financial services accessible to more people around the world. This is especially important in emerging economies, where many people still use cash. This means that financial institutions could make millions of new loans a year, and governments could save tens of billions of dollars per year. These savings, along with the increased access to financial services, would boost the balance sheets of financial-services providers.
Diverse nature of the industry
Financial services firms are striving to improve the diversity of their workforces. The Offices of Minority Women and Inclusion (OMWI) and the Federal Home Loan Banks (FHLB) track diversity data, including recruitment and hiring rates, in order to measure performance against benchmarks and peer institutions. They also incorporate diversity targets into incentive compensation goals and management performance competencies.
The diversity of the workforce can help a firm improve its customer satisfaction. One study found that employees on teams made up of diverse backgrounds were more likely to understand clients and their needs. This increased empathy leads to greater customer satisfaction and innovation.
Importance of brand image in financial services
When marketing your financial services business, it is crucial to create a brand image that sets you apart from your competitors. As with any industry, your brand image is formed by the way your audience perceives your company and how it works. Consumers are more likely to believe your brand if you project a sense of credibility and transparency about your company’s operations.
Developing a brand image for financial services means developing a holistic strategy that encompasses every aspect of your business. In the 21st century, your financial services brand will most likely incorporate digital products and services, which can augment or replace physical operations. Digital products can also be used to differentiate your brand from the competition by offering a new experience or creating a new type of value for consumers.
Growth of fintechs
Fintechs are a growing part of the financial services sector and have many positive impacts. Often partnered with traditional financial institutions, these startups have launched new products and increased efficiency. This trend has helped to lower costs for everyone involved. The growth of fintechs is most apparent in developing countries such as India, China, Mexico, and Latin America. These countries have high cell phone penetration and a wide-range of internet connectivity. As more of their populations take advantage of new technology, their economies are becoming more developed.
Several FinTech companies are aiming to disrupt the financial services industry. Examples include Personal Capital, Lending Club, Kabbage, and Wealthfront. Kabbage, for example, is a P2P lending platform that uses transactional data to make lending decisions quickly. Meanwhile, Lending Club enables peer-to-peer lending to provide funds for small businesses without a traditional financial institution. The companies are leveraging Big Data and advanced analytics to make better investment decisions.
Impact of digital gig work on financial services
Gig workers are often the most vulnerable demographic in financial services. They lack substantial credit histories and stable cash flows and struggle to access mainstream financial products. They are also one of the groups most impacted by the coronavirus pandemic, as demand plummets during lockdowns and hours are cut. Meanwhile, their contractor status locks them out of many workplace benefits.
Although the demand for online workers may increase, the risk of employment uncertainty and lower earnings is still high. The coronavirus pandemic, which has already ravaged parts of the world, further exacerbates the risky nature of online gig work. The recent COVID-19 outbreak makes it all the more important to protect people from such diseases and improve their overall health and financial security.