India’s highly diverse and comprehensive financial services industry is growing rapidly, owing to demand drivers (higher disposable incomes, customized financial solutions, etc.) and supply drivers (new service providers in existing markets, new financial solutions and products, etc.). The Indian financial services industry comprises several key subsegments. These include, but are not limited to- mutual funds, pension funds, insurance companies, stock-brokers, wealth managers, financial advisory companies, and commercial banks- ranging from small domestic players to large multinational companies. The services are provided to a diverse client base- including individuals, private businesses and public organizations. Personal loans in pune are available at low-interest rates and flexible tenure to help people overcome financial burdens.
10 Types of Financial Services:
- Banking
- Professional Advisory
- Wealth Management
- Mutual Funds
- Insurance
- Stock Market
- Treasury/Debt Instruments
- Tax/Audit Consulting
- Capital Restructuring
- Portfolio Management
These financial services are explained below:
- Banking
The banking industry is taken to be the backbone of India’s financial services industry. The country has various public sector (27), private sector (21), foreign (49), regional rural (56) as well as an urban or rural cooperative (95,000+) banks. The financial services provided in such a segment include as the following:
- Individual Banking for the purpose of checking accounts, savings accounts, debit or credit cards, etc.
- Business Banking including the merchant services, checking accounts along with the savings accounts for businesses, treasury services, etc.
- Loans that often include business loans, personal loans, home loans, automobile loans, working-capital loans.
The banking sector is easily regulated by the Reserve Bank of India abbreviated as (RBI), which monitors as well as maintains the segment’s liquidity, capitalization, along with financial health.
- Professional Advisory
India has a firm and strong presence of numerous professional financial advisory service providers, which provide multiple individuals as well as the businesses a wide portfolio of services, involving investment due diligence, M&A advisory, valuation, real-estate consulting, risk consulting, as well as taxation consulting. These offerings are generally made by a wide range of providers, involving individual domestic consultants to spread to a large number of multinational organizations.
- Wealth Management
Financial services provided within such a segment involve managing as well as an investing customers’ wealth across numerous financial instruments- involving debt, equity, mutual funds, insurance products, derivatives, structured products, commodities, as well as real estate, based on the clients’ financial goals, risk profile as well as the time horizons.
- Mutual Funds
Mutual fund service providers usually offer professional investment services across funds that are typically composed of numerous asset classes, precisely debt as well as equity-linked assets. The buy-in for mutual fund solutions is typically reduced compared to the stock market as well as debt products. Such products are very famous in India as they specifically have reduced risks, tax benefits, stable returns as well as the properties of diversification. The mutual funds segment has probably witnessed double-digit growth in such assets under management over the past five years, owing to its popularity as a low-risk wealth multiplier.
- Insurance
Financial services providers in such a segment are precisely provided across two such categories:
- General Insurance such as the automotive, home, medical, fire, travel, etc
- Life Insurance including term-life, money-back, unit-linked, pension plans, etc
- Insurance solutions usually enable individuals as well as an organization to easily safeguard against unforeseen circumstances as well as accidents.
- Payouts for such products vary across the varied nature of the product, time horizons, customer risk assessment, premiums, as well as numerous other key qualitative as well as quantitative aspects.
- In India, there is a strong and firm presence of insurance offers across life insurance which is 24 along with the general insurance for example 39 categories. The insurance market is generally regulated by the Insurance Regulatory as well as Development Authority of India abbreviated as IRDAI.
- Stock Market
The stock market segment involves investment solutions for numerous customers in Indian stock markets abbreviated as National Stock Exchange and Bombay Stock Exchange, across numerous equity-linked products. The multiple returns for customers are highly based on capital appreciation – which is growth in the value of the equity solution as well as or dividends – as well as payouts made by numerous companies to its investors.
- Treasury/Debt Instruments
Services provided in such a segment involve these investments into government as well as private organization bonds involving debt. The issuer of the bonds such as the borrower provides fixed payments for example interest as well as principal repayment to such an investor at the end of the investment period. The kinds of such instruments in such a segment involving listed bonds, non-convertible debentures, capital-gain bonds, GoI savings bonds, tax-free bonds, etc.
- Tax/Audit Consulting
Such a segment involves a large portfolio of financial services within the tax as well as auditing domain. Such a services domain can be segmented typically based on individual as well as business clients. They involve:
- Tax – Individual (determining tax liability, filing tax-returns, tax-savings advisory, etc.)
- Tax – Business (determining tax liability, transfer pricing analysis and structuring, GST registrations, tax compliance advisory, etc.)
In this auditing segment, service providers offer solutions involving statutory audits, internal audits, service tax audits, tax audits, process/transaction audits, risk audits, stock audits, etc. Such services are crucial to ensure the smooth operation of business entities from a qualitative as well as quantitative perspective, along with to mitigate risk. One can read more about taxation in India.
- Capital Restructuring
Such kinds of services are provided primarily to multiple organizations. It also involves the restructuring of capital structure (debt and equity) to bolster profitability or respond to crises such as bankruptcy, volatile markets, liquidity crunch or hostile takeovers. The types of financial solutions in this segment typically include structured transactions, lender negotiations, accelerated M&A and capital raising.
- Portfolio Management
This segment usually includes a highly specialized and customized range of solutions that enables clients to reach their financial goals through portfolio managers who analyze as well as optimize investments for clients across a wide range of assets such as the debt, equity, insurance, real estate. Such services are typically broadly targeted at HNIs as well as discretionary investment only at the discretion of fund manager with no client intervention as well as the non-discretionary decisions made with client intervention.
