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MEANING
The financial industry, or financial services industry, includes a wide range of companies and institutions involved with money, including businesses providing money management, lending, investing, insuring and securities issuance and trading services.

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The term financial services in a broad sense means mobilizing and allocating savings It includes all activities involved in transformation of savings into investments. Vital for Industrial development.

Traditional classification
Capital market Money market

Part of the financial industry:

Banks Credit card issuers Insurance companies Investment bankers Securities traders Financial planners Security exchanges

Present scenario

1.) Conservatism to dynamism 2.)Emergence of primary Equity Market 3.)Concept of credit rating 4.)Process of globalization 5.)process of liberalization
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Increased regulation across all markets is making it harder for banks to generate profits and extend sufficient credit into the system. Banks are confronted with the need to raise huge amounts of funds in 2012 to comply with new rules, which will be a difficult task in the current environment. The changed economical and geopolitical environment has also been extremely challenging for the financial services sector. The competitive and regulatory pressures for consolidation are leading to a rapid increase in M&A activity, with more than $36.5 billion worth of deals announced till May 2010 end.

A study by Project Finance International (PFI), a source of global project finance intelligence and a Thomson Reuters publication has ranked India on top in the global project finance (PF) market in 2009, ahead of Australia, Spain and the US.

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As per the Securities and Exchange Board of India (SEBI), number of registered Foreign Institutional Investors (FIIs) as on May 31, 2010 was 1710 and the cumulative investments in equity since November 1992 to May 31, 2010, was US$ 77.2 billion, while the cumulative investments in debt during the same period were US$ 13.4 billion. The total FII inflow in equity during January to May 2010 was US$ 4.6 billion while it was US$ 5.9 billion in debt. Net investment made by FIIs in equity between June 1, 2010 and June 14, 2010 was US$ 530.05 million while it was US$ 875.73 million in debt As on June 4, 2010, India's foreign exchange reserves totalled US$ 271 billion, an increase of US$ 9.87 billion over the same period last year, according to the Reserve Bank of India's Weekly Statistical Supplement.

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Housing loans grew by more than 50% and loans to the retail commercial sector rose by more than 100%. According to the weekly statistical supplement (WSS) of the Reserve Bank of India (RBI), Indian bank loans represented a rise of 19.1 per cent as of June 4, 2010 while deposits were up 14.3 per cent from the previous year. In life insurance segment, India stands at fifth position in the emerging insurance economies globally and the segment is growing at a healthy 32-34 per cent annually, according to the Life Insurance Council.

The competitive and regulatory pressures for consolidation are leading to a rapid increase in M&A activity, with more than $36.5 billion worth of deals announced till May 2010 end.

top 10 financial services companies in India

SBI Capital Markets Limited:
Bajaj Capital Limited: DSP Merrill Lynch Limited:

Birla Global Finance Limited:

Housing Development Finance Corporation: PNB Housing Finance Limited:

ICICI Group:
LIC Finance Limited: L & T Finance Limited:

Karvy Group:

Location of factor Internal

TYPE OF FACTOR Favorable Strengths oLeading financial services company oComplementary yet diversified businesses oMulti-network distribution oFinancial strength rating Opportunities Unfavorable Weaknesses oHigh combined ratio oExposure to subprime mortgage oLitigations

External

Threats oRegulations on oExpansion into India contingent commission oIncreasing demand for oSarbanes Oxley pension and retirement compliance costs products oVolatility in financial oGrowing US life insurance markets and pension market oConsolidation in financial oOpportunities in Mexico services industry oMounting insurance frauds

PESTLE ANALYSIS
Political Potential change of government Lifelong Learning policies Knowledge exchange polices Recession Maintaining competitive advantage Knowledge Exchange,Skills and capacity impacting directly on the economy, Volatility of the rand, inflation, Corruption and organised financial crime, Worldwide financial crisis Social Networks and Communities of Practice, Continued need for upliftment of the poor, Gap between the rich and the poor Culture Changing demographics Web 2.0, IT trends and the speed of change,Communication infrastructure, Costs of new technology, Increased use of technology to solicit crossborder financial services Availability of technological solutions Compliance issues relating to copyright, IPR, data protection, health & safety discrimination and human rights Availability and fitness of estate Green agenda

Economic

Social

Technological

Legal Environmental

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