“The financial sector plays a major role in the country’s economy. The financial services sector consists of banks, investment sectors, lenders, insurance companies, etc. Let us learn more in this article.”
The Financial Services Sector is a very important aspect of our country’s economic development. The financial system is responsible for managing the flow of funds between people and investors. With the help of a huge financial system, we can easily borrow, invest, and save our money with utmost security.
The financial services sector consists of banking, payment services, tax, planning, accounting, credit cards, investment, etc. Let us know more about the importance of financial sectors and their important components in this article.
Banking And Financial Services In India
Banking and Financial Services in India play a major role in the economic well-being of the country. The BFSI sector in India has shown a rapid increase in the past years by providing various opportunities to a large section of groups.
With the rapid advancement in technology, BFSI sector players like private banks, investment banks, life insurance, stock broking companies, micronfinance companies, and NBFCs have seen a rapid advancement over the years. A country like India, being a developing country, heavily depends on this sector for its overall economic development.
Qualification Required For Banking and Financial Services
The minimum qualifications for banking and financial services are not fixed. For an entry-level job, candidates only need to have a minimum high school or diploma certificate. However, a candidate can have a bachelor’s degree in finance, risk management, and analysis for various job roles in the BFSI sector.
However, let us talk about some major subjects that candidates must be familiar with for banking and financial services opportunities in 2024.
- The role of Banks in the financial system
- Function of banks such as deposits, investment banks, etc.
- Overview of financial markets (money market, capital market)
- Understanding stock exchanges and securities markets
- Types of financial risks
- Risk management techniques and tools
- Overview of financial products and services
- Impact of technology on the finance industry
- Financial planning and wealth management
- Ethics and Corporate Social Responsibility (CSR)
- Financial Analysis
These are some of the general topics that are important for the people associated with banking and financial services.
The Importance of Banking And Financial Services in India
Banking and financial services are the backbone of our country’s economic strength. They are responsible for ensuring various services and maintaining the flow of products and services in the marketplace.
There are various roles that require effective banking and financial services to be in place. Let us discuss the major importance of Banking and financial services.
- Banking services are responsible for providing a flow of funds between investors and depositors. They ensure that the savings or deposits are invested in effective production.
- Banking and financial services ensure that the deposits made are invested in productive businesses. This activity helps to ensure economic balance and also maintains capital flow.
- Banks provide loans for individuals and business purposes. It also promotes funding for big projects, expanding businesses, and meeting more financial needs.
- Banking services are essential for providing financial services to individuals or businesses.
- Financial services are very responsible for mitigating risks involved for individuals and businesses. There are many types of risk management, such as credit risk, market risk, operational risk, and more.
- They provide economic stability and facilitate job opportunities for freshers as well as experienced.
- The banking and financial services are flexible and have significantly improved in the past few years. Many new innovations, like mobile payments, online banking, UPI payments, fintech solutions, etc., made this sector more promising.
Also check: BFSI Full Form
Banking And Financial Services Salary in India
BFSI sectors consist of many job roles and opportunities which can give your career a great start. Let us learn some of the major job roles and their average salaries.
| Banking and Financial Services Salary | ||
| Job Profile | Minimum Educational Qualification | Salary (Per Annum) |
| Business Correspondent/ Facilitator | Passed Class Xth from a recognized board. | Rs. 4,00,000 to Rs. 10,00,000 |
| Debt Recovery Agent | Passed high school or equivalent | Rs 2 lakh to Rs. 4 lakh |
| Credit Processing Associate | Bachelor’s degree in finance, business, economics or a related field | Rs. 3 lakh to 5 Lakh |
| Microfinance Executive | Bachelor degree in finance, business, economics or a related field | Rs. 2 lakh to Rs. 4 lakh |
| Insurance Agent | High school or diploma in an equivalent area. | Rs. 2 lakh to Rs. 4 lakh |
| Mutual Fund Agent | High school or diploma in an equivalent area. | Rs. 2 lakh to Rs. 4 lakh |
| Accounts Executive/ Assistant | Bachelor’s degree in finance, business, economics or a related field | Rs. 2 lakh to Rs. 4 lakh |
Banking and Financial Services Components
Let us find out the major banking and financial services below.
1. Banking
The Banking sector is one of the most important sectors in the BFSI sector. It forms the foundation of a country’s financial services and is responsible for providing various services, such as loans, deposits, credits, etc., to individuals or businesses. Banks make money by making productive investments and collecting interest.
2. Mortgages
Mortgages are long-term loans provided by various financial institutions, mainly banks, with a security. The security is mainly the property or some high-value assets. Banks generally use a person or business credit report to approve the loan request for further assurance. The bank or the financial services here earn through the interest fixed for the tenure.
3. Payment Services
Nowadays, with the advancement in technologies, there are various payment services like online banking, UPI transactions, net banking, etc. The payment services are carried out through various credit or debit cards, such as Master card, rupay, or digital payments through UPI. UPI payments are simple payments that can be used by small as well as large businesses for instant, effortless payments.
4. Insurance
The Insurance sector plays a major role in risk management. The role of insurance is to provide protection against financial losses from accidents, property damages, illness, liability claims, etc. There are many options available for insurance services, such as health, life, property, and many more.
To avail of the insurance cover, you only need to pay the insurance provider their share of the cover. This is an effective technique for providing economic stability and risk management.
5. Investment
Investment plays a crucial role in banking and financial services. People invest in various stocks, bonds, mutual funds, and many more to earn big returns. People who invest earn through interest, rental income, dividends, and other different types of earnings.
The return, however, depends upon a number of factors, such as the financial market, market conditions, goals, etc. People take the advice of financial advisors who advise them on the best approach and charge them commissions.
Banking and Financial Services FAQs
What is the role of financial services in the economy of a country?
Banking and financial services play a major role in a country's economy. It provides growth and investment opportunities with the help of banking, insurance companies and investment firms. It forms the backbone of a country's economic development.
What are the major components of Financial services?
The major components of financial services are banks, investment firms, insurance companies, mortgages, payment services and more.
What is the importance of financial services in a country?
Financial services are important for individuals and businesses to invest, manage risks, insurance services, get loans, and many other services that would only be possible with the extensive financial services available to us.
