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Overview of BFSI Domain

The document discusses the Banking, Financial Services and Insurance (BFSI) sector in India. It notes that BFSI is set to significantly grow in India due to rising incomes, new financial products, innovation, and greater customer awareness. BFSI includes companies that provide banking, financial services, and insurance. It is a major contributor to India's GDP and is projected to become one of the largest BFSI markets in the world by 2025. However, the sector faces challenges in expanding access to rural populations and providing services across the country.

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3K views

Overview of BFSI Domain

The document discusses the Banking, Financial Services and Insurance (BFSI) sector in India. It notes that BFSI is set to significantly grow in India due to rising incomes, new financial products, innovation, and greater customer awareness. BFSI includes companies that provide banking, financial services, and insurance. It is a major contributor to India's GDP and is projected to become one of the largest BFSI markets in the world by 2025. However, the sector faces challenges in expanding access to rural populations and providing services across the country.

Uploaded by

beena antu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Banking, Financial Services and Insurance (BFSI)

Banking, Financial Services and Insurance (BFSI) is set to grow exponentially in


India due to the rising per capita income, introduction of new products, innovation
in technology, expanding distribution, networking and increasing customer
awareness of financial products. BFSI Industry has seen bold reforms in the last 15
years and will continue to be a top priority focus industry for India’s economic
development based on inclusive growth.

The Banking, Financial services, and Insurance (BFSI) sector is an industry term
used to define companies that provide a range of such financial products/services.
Those companies who provide product mix of financial products or services are
termed as Banking, Financial services and Insurance (BFSI).Their services include
core banking, retail, private, corporate, investment, credit /debit cards and also
stock-broking, payment gateways, mutual funds, insurance covers etc. 

Banking, financial services and insurance (BFSI) is an industry term for


companies that provide a range of such financial products or services. This
includes universal banks that provide a range of financial services or companies
that operate in one or more of these financial sectors. BFSI comprises commercial
banks, insurance companies, non-banking financial companies, cooperatives,
pensions funds, mutual funds and other smaller financial entities.
The Banking part of BFSI may include core banking, retail, private, corporate,
investment and cards. Financial services may include stock-broking, payment
gateways, mutual funds. Insurance covers both life insurance and general
insurance.
Its potential for growth is especially stronger in developing nation like India, as it
is one of the fastest growing economies in the world. Core banking, retail, private,
corporate, investment, etc are various kinds of banking services available under
this space.

Indian economy's growth

According to a report by National Skill Development Corporation (NSDC) for


banking, financial services and insurance industry, India is one of the few countries
in recent times to have a backing of strong productivity gains and progressive
integration into the global economy.
It also plays a substantial role in promoting the long term growth
of the Indian economy, led by the major segments of this industry, viz. banking,
insurance and mutual funds. Moreover, the report also stated that the banking and
insurance sector contributes more than 6 per cent towards India's GDP during the
year ended 2008.
BFSI sector in India is valued at Rs. 81 trillion and is likely to become fifth largest
in the world by year 2020 and third largest by year 2025
 
However BFSI sector is facing challenges also. One of the most challenges is of
demand and supply and services are not reaching to the certain fraction of the
population which is rural and doesn’t have access to banking thus hindering the
growth of BFSI sector. 
 
Report from NABARD says that out of 46 million farmer households only 28 %
are getting loans for farming sector and rest are not getting access even and this
poor population is dependent on traditional barrowings from bhomidars and
unorganized sector which exploits them at their maximum. 
 
Being an important sector that can further accelerate the growth of the country, the
manpower requirement in the BFSI industry has risen to fuel that progress, with
over 8.4 million individuals projected to be employed in the next couple of years.
The NSDC also reported that the projected human resource requirement between
2008 and 2022 is estimated to reach over 4.2 million.
RBI has taken many steps to rectify and restore reach in unbanked areas. This
sector is maneuvering it’s strategy and is trying to reach masses with the help of
technology so that consumer are benefited. Usage of mobile banking is seen as
transparency and faster delivery to consumers. 

 
Recent Banking Laws amendment bill which was passed in parliament is likely to
change the overall BFSI sector and since RBI is issuing new license to newcomers
in banking, more banks will be opening shortly and hopefully each bank will open
5000 vacancies.
 
Report from Dun and Bradstreet ( D & B ) says that Indian economy is likely to get
a steady growth trajectory with reforms coming in future and with the likelihood of
government changing, new face of finance minister will have to perform. 
 
With the help of investor awareness environment and strict regulations and plenty
of positive measures, unlimited opportunities will come on way to BFSI sector and
now with just providing a vanilla banking services the entire BFSI sector will
transform to ‘anytime anywhere banking’.

Opportunities and Challenges:

 BFSI industry is set to grow significantly in the coming years due to India’s
economic expansion and growing awareness among the population of these
financial products / services
 New and wider products will provide immense opportunities to develop
niche areas
 The industry has adopted IT as an integral part of business strategy, where
RSM is well positioned to provide various services on such IT platforms
 High supervision by regulators will require constant vigilance and need to
adopt measures to mitigate risks based on various control measures
including ‘Risk Based Audits’ (RBA) as provided by:
o The Reserve Bank of India in its RBA guidelines to banks
o The Insurance Regulatory authority of India (IRDA) to the insurance
industry
o Securities Exchange Board of India (SEBI) for the mutual fund
industry
BFSI is an acronym for Banking, Financial Services and Insurance and popular
as an industry term for companies that provide a range of such products/services
and is commonly used by IT/ITES/BPO companies and technical/professional
services firms that manage data processing, application testing and software
development activities in this domain.  Banking may include core banking, retail,
private, corporate, investment, cards and the like. Financial Services may include
stock-broking, payment gateways, mutual funds etc. Insurance covers both life and
non-life.

Technology is allowing the BFSI industry to reach out to new markets and offer
novel products and services through efficient delivery channels. On the other hand,
data security and availability of information updates is critical to the banking and
insurance business, mandating high network uptime, rapid fault detection and
quick problem resolution. The banking and financial industry is also challenged by
the large number of existing legacy systems in its infrastructure. The vertical thus
has a unique set of requirements and challenges and this section discusses them in
detail.
Some Segments of BFSI Industry:

 Cards
 Banking Technology
 Depository/Registry
 Custody
 Reconciliations
 Retail Banking
 Investment Banking
 Risk and Compliance
 Surveillance
 Corporate Banking
 Wealth Management
 Exchanges/Trading/Broker-Dealer
 Clearing/CCP
 Life Insurance
 General Insurance

Reinsurance

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