Future of Financial Services providers...

Rising income and burgeoning demand of middle class all across the globe coerce financial services providers (FSP) to reset their products portfolios and channel management. Further, the soaring competition within these FSPs force them to retain and grow their customers base. To meet these business challenges FSPs want to come up with more robust platform to support their clients with the help of IT service providers

After 1979 recession, financial sector had boomed in US. The whole financial services industry had taken precautionary measures to avoid such situation. Thanks to technological enhancements, most of the companies built themselves over the years and showed robust growth on charts. But time and again, Market tests sporadically and this time severity of the problem was more than expected

Business is always on top priority, technology is just an enabler.

In this dynamic world technology play a crucial role to help business. If we look out at financial services providers, the damage that has done, is huge. Many Financial Services Providers (FSPs) filed bankruptcy, merged and taken over by their rivals. In the same time, investors, shareholders have lost their hard earned money in blood bath of the market. We can’t point out a single individual or company or organization to blame, it is the greed that played a crucial role in submerging the entire ship.

Greediness in housing market- People were getting huge returns 25-30% in property that in turn attracted them to purchase multiple houses. Investment banks and hedge funds also saw lot of opportunity of minting money in this whole process. Investment banking companies leveraged their positions by more than 30x. US mortgage providers, Fannie Mae and Freddie Mac, also can’t be away from it and they leveraged their position by 70x . But sudden rise in interest rates and predatory lending and predatory borrowing causes the whole market collapse within a year When the crisis started, liquidity became a problem for investment banking companies and because of liquidity crunch, they collapsed over night.

Doom days are in ?

Every wrong thing starts from greed and that leads companies to leverage their position. This is exactly happened in US. Subprime crisis was the result of leveraging , expose more , what big giants, now and will never think. Everything started affecting, from collapse of some big companies- Lehman brothers, Bear stern , Morgan Stanley - to rising commodity prices, recession in the economy. So many job cuts all across the globe. The question here is :-

What is the future?
and where are we heading to ?

Simply, we are heading nowhere. If Fed can overcome by this crisis, what will be the next? Credit default? yes, I am talking about credit card default payments. what do thing people will pay money without having jobs. So many job cuts will certainly have an impact of these credit card providing companies. People are carrying 25 odd cards with enough credit limit. Can you understand the severity of the problem.?

Then what is the solution?

To avoid credit default, Credit card companies must manage their databases effectively. For that their systems must be in sync with the latest updates. Any transaction done by any user should be indicated , that level of Technology is needed. It will help Card companies to understand their customers well.

Lehman brother bankrupts

Lehman brothers bankrupts, Big turmoil in the US economy and even rest of the world. Lot of information and news spread all across about 158 years old giant and global economy. The whole financial sectors affected and analyst started predicting about future. It's a routine now, when something happens, lot of hue and cry starts.

"You can't call it a company anymore, it's more of global economy unto itself." People said like this.

What do you thing $619billion debt? Is it that large enough to melt down the whole economy?

Nobody knows the futures, but after fall of Lehman brothers, Laws are going to be very stringent. The role of risk professionals are very important. And there are opportunities for those who wants to pursue Financial Risk Professional Course.