Pros And Cons Of The Financial Service Industry

The banking industry has undergone major upheaval in recent years, largely due to the lingering recessionary environment and increased regulatory environment. Many banks have failed in the face of such tough environmental conditions. These conditions

In the early 1980’s the conservative government headed by Margaret Thatcher, began to liberalise the financial industry. This promoted more competition between firms to attract customers, and offer credit facilities to a wider range of consumers. Companies used aggressive marketing to attract customers, but the amount of different products available on the market to customers made it confusing, and many took on loans and credit cards without fully understanding the product they were buying, or the interest rates they would have to pay. This resulted in a wider range of consumers having access to buying goods on

There are various categories of banking; these include retail banking, directly dealing with small businesses and persons. Commercial and Corporate banking which offers services to medium and large businesses (Koch & MacDonald 2010). Private banking, deals with individuals, offering them one on one service. The last category is investment banking. These help clients to raise capital and often invest in financial markets. Most global banking institutions provide all these services combined. With all these institutions in existence within the same localities and offering similar services, there is a need to regulate the industry so as to protect the consumer and provide fair working environment for all banks (Du & Girma, 2011).

Mis-selling gave people the wrong impression that they were insured if they lost their jobs or their source of income. People lose trust in banking products as they expect to be assured in difficult times but when they find out they are not insured and will still have to repay loans they get mentally stressed and they feel like they can’t rely on banking products provided by RBS.

While financial banks were inadequately controlled by regulatory agencies, there was a necessity for fresh policies to resolve these issues. Prior to the Volcker Rule becoming implemented, the crooked financial activity done at the time had affected the clients of the banks. The complexity of the regulations caused dissatisfaction for the clients and customers and eventually affected the overall business flow of the bank institutions. There was a strong need for new procedures and restrictions before the banking industry would have another breakdown and in the worst case, cause another financial crisis within the American economy. The biggest problem during this crucial financial time included how the banking industry was consistently earning large amount of money from these high-risk trades with the institution’s own

The aim of this report is to investigate the Douglas Harvey Barber v Guardian Royal Exchange case. The main findings of this report is to see what effect Douglas Harvey Barber had on the financial services industry before and after his case.

The section above traced the evolution of the banking industry’s adoption of IT based innovations with the aim of offering a suite of products and services to delight their retail and corporate customers and to gain cost reduction and market share. Whilst these developments have grown the market universe exponentially it has also created opportunities for crime syndicates and fraudsters to take advantage of the wider canvas and customer ignorance thrown up by the variety of online banking applications. According to Financial Fraud Action UK (2014), in the first six months of 2014, losses on remote banking fraud rose to £35.9 million, up 59 per cent from 2013 in the U.K. Online banking fraud comprised £29.3 million of that total, up 71 per cent from 2013. This has made the online banking service retailers sensitive to the erosion in their profits as well as the increased levels of anxiety in customers. To arrest this trend the banks are constantly endeavouring to evolve their payment and transaction rules in the hope of thwarting the criminal and fraud activity and to stay ahead. The fraudsters are never far behind as they constantly shift their focus from the well defended to less defended targets or the weakest links in the market. With time to market pressures the banks often launch new products and services without adequate safeguards or defence. Indeed, the newness of the services, and the unknowns about how

The message that Joanne Bradford is sending is clear: “Don’t Bank. SoFi.” I believe that large commercial banks have not fully gained back the trust of the people, and

In recent years, scandal after scandal has eroded public confidence in the financial services sector. Since the onset of the financial crisis, there have been calls for a rethink of the values and culture of firms operating within the space. Attempts to regulate the financial services sector in this regard are increasingly stringent as regulators apply sanctions to firms and individual actors for non-compliance. Toshiba scandal that placed some of the blame on the company's internal audit

The two largest modern bank runs in American history were the Savings & Loans Crisis of the 1980’s and the Financial Crisis in 2008-2009. Both crises left permanent scars on our financial system and provide important lessons moving forward. In this paper, I will provide a comparative analysis of the various causes, economic effect and regulatory responses, in an attempt to perhaps display a pattern for these crises that we can lean on to prevent future ones. Ultimately, the analysis yielded that at the core both crises were caused by regulatory negligence, attempting to cheat the system and government policy mistakes regarding financial policy, all contributed to the rise of these crises. Both had detrimental economic effects, and both regulatory

Extensive research has determined that the banking industry is in an unstable state. The industry’s profits have

Infinity bank was one of the 10 largest banks in the UK with over 1800 retail branches. However, due to the change in the nature of the banking industry since the 1980’s Infinity bank had seen a consistent drop in its profitability. Deregulation of the industry had been one of the major changes that had taken place during this time which had increased the competition in the industry. Even though Infinity had followed other major banks in responding to this challenge by cutting costs, closing branches and making use of information technology, its results were far worse than others.

During the last financial crisis, weaknesses were exposed within the UK’s system. The tripartite regulatory framework,

Financial regulation is necessary and without an efficient set of regulations a country could see rises in unemployment, interest rates, and the deterioration of financial intermediaries. With the globalization of the financial industry, it becomes more and more common for businesses to seek financing outside of their county 's boarders. These innovations in the financial industry stress why it is so important for regulations to be created and changed to reduce risk and asymmetric information in financial systems.

The insurance has developed into a significant issue in financial miss-selling thus misleading the public they can easily access the credit if they adopt the offered insurance policy. Payment to shareholders and supporting the bank’s activities have always necessitated the need for making profits; this can be traced back to the privatisation of financial institutions. Banks are also seen as disregarding the outlined banking practice resulting to an unregulated banking system (Becker & Posner,2012). The financial institutions are therefore willing to put aside these practices so as to maintain the attractive profit figures as it is the same profits that motivate the financial sector and the people involved.