Definition of Developments in the Sector

Financial Sector Reform

The noteworthy financial sector reform was made all over the world in the last two decades by way of Liberalisation, Privatisation and Globalization (LPG) for reducing or eradicating the deformations in financial markets and reinforcing financial institutions.

Technological Developments

The scenario of global financial system is often changing due to the Technological developments i.e. internet.

Consolidation

The enduring consolidation of financial institutions is one of the most prominent contemporary features of the financial landscape both within and across many industrial countries. The leading financial services firms are increasing in size due to merger in the conglomerate and also in financial services industry. The amlgamtion/absorption process involves two facets in the financial industry namely same line of businessand multiple lines of business. The global financial crisis of 2007-08 hadaccelerated the trend towards financial industry mergers and the weakened firms had been forced to merger with stronger rivals.

Globalization of Financial Services

Globalization of Financial services sectors are increasing in the present scenario of financial system. The market shares of Foreign –owned banks and foreign financial services providers have increased drastically in East Asia, Eastern Europe and Latin America. Cross-border trade in financial services is also an important component of services exports worldwide.

Changing Role of Financial Service Providers

In the contemporary world, nationalized banks are doing fee based and fund based financial services (merchant banking, mutual funds, insurance, venture capital, etc.). Non-banking and other financial institutions are providing banking products also. The scope of financial service provider is expanded at large.

Competition and Outsourcing