Explain the terms Financial Services and characteristics of Financial Services.
Financial services are the economic services provided by the finance industry, which encompasses a broad range of organizations that manage money, banks, insurance companies, finance companies, investment funds etc. and some government sponsored enterprises.
The characteristics of financial services are as follows:
Intangibility: The basic characteristics of financial services are that they are intangible in nature. For financial services to be successfully created and marketed, the institutions providing them must have a good image and the confidence of its clients. Quality and Innovativeness of services are the focal points for building credibility and, gaining the trust of the clients.
Customer Orientation: The institutions providing financial services study the needs of the customers in detail. Based on the results of the study, they come out with innovative financial strategies that give due regard to costs, liquidity, and maturity considerations for various financial products. This way, financial services are customer-oriented.
Also Read | How To Develop World Class Behaviors Skills?
Inseparability: The functions of producing and supplying financial services have to be carried out simultaneously.
Perish-ability: Financial services have to be created and delivered to the target clients. They cannot be stored. They have to be supplied according to the requirements of customers. Hence, it is imperative that the providers of financial services ensure a match between demand and supply.
Dynamism: The financial services must be dynamic. They have to be constantly defined and refined. On the basis of socio-economic changes occurring-in the economy, such as disposable income, standard of living, level of education, etc., financial services institutions must be proactive in nature and evolve new services by visualizing the expectations of the market.