Icici Securities Ltd. Live Project

INTRODUCTION TO THE INDUSTRY
Financial services like banking, merchant banking, factoring, Insurance, Venture capital, act as
vital machinery of an economy. These financial services that facilitate nancial transactions of
individuals and institutional services resulting in their resources allocation activities through time.
The sector that deals with such financial services is known as financial services sector.
The Three pillars of Financial System are:
Banking
Insurance and Mutual Funds
Online Trading
FINANCIAL INSTITUTION
In financial economics, a financial institution is an institution that provides financial services for
its clients or members. Probably the most important financial service provided by financial
institutions is acting as financial intermediaries. Most financial institutions are regulated by the
government.
Broadly speaking, there are three major types of financial institutions:
Depositary Institutions : Deposit-taking institutions that accept and manage deposits

and make loans, including banks, building societies, credit unions, trust companies, and
mortgage loan companies
Contractual Institutions: Insurance companies and pension funds; and
Investment Institutes: Investment Banks, underwriters, brokerage firms.
BROKING FIRM
The stock broking industry is a service-oriented industry where brokers act as agents for investors
when a security is bought or sold and are compensated with a commission. Investors would not
hesitate to switch to alternative brokerage houses if they do not obtain satisfaction. Providing
quality service and hence customer satisfaction should thus be recognized as a key strategy and a
crucial element of long-run success and profitability for stock broking businesses.
The Securities Brokerage Industry is cyclical and comprised of two distinct types of businesses.
Brokerages, also known as financial services companies, strive to meet the investing needs of their
clients, and exchanges facilitate securities trading.
Net profits correlate to the performance of the broader equity market. In this market with less
differentiated products and many players, there exists an oligopoly, characterized by tough
competition, entry and exit barriers and many more.
Little has been done towards understanding the expectations investors hold from their
stockbrokers. Since expectations serve as benchmark to gauge the service level of brokers, the
delivery of services that exceed customer expectations is one strategy that can give firms a
competitive advantage. Therefore, it would seem beneficial for stockbrokerage firms, in a dynamic
economic environment like India, to provide service at a good scale of quality. In addition,
stockbrokers have much to gain in understanding investors expectations of them, as this would
help the stockbrokers to serve their customers better and foster long-lasting relationship with their
customers.
TYPES OF BROKERAGE FIRMS
As an investor, you should shop for a brokerage firm just as you would for any other professional
service. Brokerage firms come in all sizes, from "one-man" firms to international
corporations. Similarly, the services offered by each firm and the commissions they charge vary
significantly.
Brokerage firms may be classified into three basic types: full-service, discount and limited
products.
1). FULL-SERVICE BROKERAGE FIRM:
A full service brokerage firm can provide you with a complete package of investment services,
including recommending securities, researching a particular issue, or providing individualized
service through a salesperson. The firm receives its payment in the form of a commission that is
calculated according to the type of security and the amount you are investing. A full-service
firm is generally best for those who are new to the market or who do not have the time or the
desire to do their own investment research.
2).DISCOUNT BROKERAGE FIRM:
It is a business that charges clients significantly lower fees than a traditional brokerage firm but
without providing financial advice. Discount brokers typically allow investors as well as
consumers of financial services to buy and sell on-line while offering comparatively fewer services
and/or support.While a discount brokerage also can provide you with a wide range of services, its
salespersons are not allowed to give investment advice, to make recommendations or to provide
research materials. For these reasons, a discount firm can offer substantially lower commissions
than full-service brokers. Experienced investors capable of doing their own investment research
typically uses a discount firm.
3).LIMITED PRODUCTS FIRM:
These brokerage firms specialize in a limited number of securities products, such as mutual funds,
limited partnerships or specific bonds.
RECENT ADVANCEMENTS IN THE INDUSTRY

The rise of digital technology has dramatically altered the landscape in the financial-services
sector. Banks offer financial planning and trading applications through smartphones and social
media; cloud technologies are widely accepted, and in many cases robotics are already reducing
cost and increasing quality. Since 2011, the number of startups in fintech (technology-based
companies that often compete against traditional financial-services, or FS, firms) has risen more
than 50 percent.
All this activity has provided new opportunities (and new competitive threats) for the industry.
There is thus a significantly higher premium on the performance of the IT teams in FS institutions.
To meet the demands of the new marketplace to offer competitive, feature-laden, well-designed
digital products and services, with a much faster speed-to-market, while lowering costs and
continuing to support legacy systems an IT function has to be flexible, efficient, and responsive.
But those adjectives are not always applied to conventional IT departments. Many financial-
services firms will have to do much more than merely reexamine their go-to-market strategies;
they must also dispassionately reassess their IT operating model, and be prepared to jettison the
approaches they have used for decades.
TOP 10 FINANCIAL SERVICES COMPANY;
Add logo in all
1. SBI Capital Markets Limited.
2. Bajaj Capital Limited.
3. DSP Merrill Lynch Limited.
4. Birla Global Finance Limited.
5. Housing Development Finance Corporation.
6. PNB Housing Finance Limited.
7. ICICI Group.
8. LIC Finance Limited.
9. L & T Finance Limited.

10. Karvy Group.
Add Michael porter 5 value chain.
Bargaining power of suppliers

-Low supplier bargaining power
-Few alternatives available
-Subject to RBI Rules and Regulation
Rivalry Threat of
substitutes
High threat from substitutes
like mutual funds,Tbills,
Government securities
Intense competition, many
private, public, co-operative,foreign banks
Bargaining power of customers

High bargaining power -Low switching cost -Large no. of alternatives
-Homogeneous service by banks -Full information available with customers

Icici Securities Ltd. Live Project

Uploaded by

Copyright:

Available Formats

Icici Securities Ltd. Live Project

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Icici Securities Ltd. Live Project

Uploaded by

Copyright:

Available Formats

INTRODUCTION TO THE INDUSTRY

The Three pillars of Financial System are:

Broadly speaking, there are three major types of financial institutions:

Depositary Institutions : Deposit-taking institutions that accept and manage deposits

TYPES OF BROKERAGE FIRMS

3).LIMITED PRODUCTS FIRM:

RECENT ADVANCEMENTS IN THE INDUSTRY

2. Bajaj Capital Limited.

3. DSP Merrill Lynch Limited.

4. Birla Global Finance Limited.

5. Housing Development Finance Corporation.

6. PNB Housing Finance Limited.

9. L & T Finance Limited.

Bargaining power of suppliers

Bargaining power of customers

You might also like