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Financial Services Sector Global Developments

The financial services sector is facing significant challenges as the global crisis continues to unfold. Continuous imbalances, such as long stretches of low interest rates, increasingly rising asset prices, and large credit and savings imbalances, are at the root of the crisis. The World Economic Forum’s 2007 and 2008 reports forecast that these developments will continue to be a market concern.If you wish to learn more about this, visit Charles R. Green & Associates, Inc.

Earlier decades of exceptional growth and capitalism at its best have forced the economy to adjust to tighter credit, increased government interference, slowed globalisation, and no economic growth. The industry faces a serious risk of stunted growth as regulations in the United States become more stringent and credit becomes more scarce. According to Max von Bismarck, Director and Head of Investor Industries, the global recession is impacting the financial sector due to capital markets and reduced aggregate demand.

This article will provide financial service industry executives, staff, and investors with five specific and timely developments to bear in mind as they plan their growth strategies for the next five years. These five main developments will have a holistic and systematic effect on the post-financial-crisis world.

FIVE IMPORTANT TRENDS

BANKING ON A GLOBAL SCALE. While several banks, such as American Express, Citibank, and JPMorgan Chase, do business in several countries, according to the World Bank, they are mostly regional in the United States. The financial sector would need to enter emerging markets in order to expand. For businesses with a more ambitious growth plan, expanding into developing markets like Africa and Asia offers unrivalled profit and market share opportunities.

SHARING OF AN INFORMATION TECHNOLOGY PLATFORM. According to Network World, financial service firms’ business strategies must be changed to account for the new dynamics and uncertainties of today’s sector. For future success, quick access to knowledge and integration across product lines and geographies are important. Firms must minimise costs in order to deliver information to a global market. Platform sharing is one cost-effective initiative; similar to how mobile phone providers partner with local businesses to minimise costs and expand connectivity, financial institutions may do the same.

ELECTRONIC BANKING. Personal and business banking transactions are increasingly conducted through mobile phones, according to a special report from The Economist. With 3.5 billion people owning cell phones and an estimated 10-20 percent year over year rise, personal and business banking transactions are increasingly conducted through cell phones. As a result, in order to succeed in the marketplace, E-banking capability is rapidly becoming a prerequisite. Via Internet-based service applications, e-banking capabilities provide businesses with critical versatility and differentiation in the industry.

MONEY ON THE GO. Because of the rising use of cell phones in emerging markets, mobile money is a secure and low-cost financial sector initiative. It is a more convenient way to send money to family and friends, as well as make payments and withdrawals without having to visit a physical bank or payment centre. Mobile money, according to M-Pesa, an early developer, “has enormous social and economic benefits.”