Academic journal article Global Business and Management Research: An International Journal

Investors Preference on Financial Services

Academic journal article Global Business and Management Research: An International Journal

Investors Preference on Financial Services

Article excerpt

Introduction

Economic development of a nation is depends on the performance of the financial process and capital formulation of the nation. Efficient financial system will automatically formulate required capital for investment. The non banking financial services in India have growing continuously over a period of time, in terms of number, deposit and so on. Indian financial sector has reviving of its positive sentiments, formation of a stable newly elected government, has the ripple effect on all the financial services in India. Financial sector including banking and insurance, and mutual funds and share broking business are beginning to reap the benefits of a good closure for 2008-09. In 2008-09, the Indian economy is estimated to have grown by 6.7 per cent. According to the latest Central Statistical Organization (CSO) data, financial services and real estate sector rose by 9.5 per cent in the first quarter of 200910.

The government has taken a number of steps in recent months to revive the economy, including slashing interest rates, lowering factory levies and more than doubling the limit on foreign investment in corporate bonds. The financial services space is a rapidly growing one in India. With constant deregulatory measures, exposure to international financial markets, introduction of IT enabled service facilities and the introduction of new products and services, the Indian financial service sector is charting an impressive growth path.

Introduction of communication and network technologies has created paradigm shifts in the share market operations. Technology has enabled organizations to bring about innovations in products and services. Exchanges all over the world has moved to electronic trading systems which are cheaper, wider reach and provide a better mechanism for trade and post trade execution.

The country received US$ 45 billion in foreign currency remittances from non-resident Indians in 2008, the highest in the world. April-May 2009 saw increased inflow in to equity with investors steadily turning positive on equity according to mutual fund analysts. As per the Securities and Exchange Board of India (SEBI), on May 15, net investment of mutual funds in equity was around US$ 83.3 million lowering to US$ 20.5 million on May 21. As against this, net investment of mutual funds in debt has more than tripled from US$ 42.9 million on May 15 to US$ 134.2 million on May 31, 2009.

Financial Services

Service is something that consumers use at any moment of any day. Financial services constitute a large and growing sector in almost all economies. Quality and effective financial service is the backbone of a healthy economic system. Trade and investment flows in financial services have been growing rapidly with the emergence of new and growing markets in developing and transition economies, with modernization, rapid technological change, use of new financial instruments, and financial and trade liberalization. The financial services sector is also quite large and complex and covers a wide range of activities and instruments, including Financial services organizations are striving to achieve increasingly ambitious profit and growth targets against a background of heightened risk, regulation and market pressures. Customer needs and expectations are evolving in the face of increasing personal wealth. Intense competition has squeezed industry margins and forced organizations to cut costs while still seeking to enhance the quality of client choice and service. The battle for talent is also heating up as companies seek to enhance innovation, customer loyalty and investment returns. The corollary of this market evolution is increasing risk as products become more complex, organizations more diffuse and the business environment ever more uncertain. Regulation is also tightening in the wake of public and government pressure for improved governance, transparency and accountability. …

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