DISCUSS AND CRITICALLY EVALUATE THE MAJOR FACTORS

SHAPING THE DEVELOPMENT AND EVOLUTION OF RETAIL

FINANCIAL SERVICES AROUND THE WORLD.
The financial system has evolved over the last few decades. A few factors that
have contributed to this evolution are globalization, changes in customer
preference , Increase sophistication and technological innovation and change in
the banking framework.
GLOBALIZATION
Since the mid- 1980s, we have seen a tremendous appearance of foreign companies
within our local economies. Predominately, large multinational firms from
developed countries have found their way into developing countries. Within the
group of multinational firms appearing are financial institutions. The financial
institutions bring a tremendous amount of knowledge and information into their
host countries. They have also led a dramatic increase in competition with local
banks already operating. As many indigenous banks have falling customer
confidence they have sought to revamp their services to include wire transfers,
drafts, customer support ATMs among other services as a way to curtail advances
from the opposition. Globalization has opened the doors to integrated markets
being the norm and though physical geographical boarders still exist the market
boarders have been largely eroded. This erosion has meant that financial
institutions now have become congruent with actions of a systematically important
institution having an indelible impact on the financial system.
TECHNOLOGY
Technology has been an essential partner in the financial services industry,
providing the innovative incremental advances necessary for the industry to
upgrade and expand its services. Gone are the days in which a passbook is used to
keep account balances or files are used to hold accounts. Computers have
revolutionized the financial system in terms of how transactions are recorded.
Improvements in storage capacity and processing speed have had a impact on data
management and transactional capabilities with accompanying reduction cost.
Technology integrate and process information from a range of sources which in
return enables proper risk management which opens new opportunities for retail

financing . Retail firms use vastly increased information resources therefore to

offer a wide range of services at significantly lower costs. Technology created
strategies for enriching data to achieve larger business objectives. Such strategies
allowed better reporting and analytical capabilities for example the use of data to
test risk and investment assumptions. Internet banking has received the most
coverage in the past decade.
THE INCREASING SOPHISTICATION AND CUSTOMER SOPHISTICATION
The increasing sophistication of shoppers has forced retailers to tailor their services
and create unique goods to satisfy them. Banks must move beyond simply meeting
their profit and growth goals to delivering more complexity in the customer
experience. An example of customer need is that some customers have a series of
financial preferences that are slightly different from those of traditional retail
banking customers. Customer preferences have played a part in the evolution of the
financial system. Thanks to the now available online shopping, banks have been
pressured into making depositors funds more accessible to make purchases. Many
customers are also very busy people who do not have the time stand in the line to
make a withdrawal or pay bills. This has led to the introduction of ATM
(Automated Teller Machine) and internet banking which has allowed customers to
check their balances and pay their bills.
CHANGES IN THE REGULATORY ENVIRONMENT
With all these innovations we must bear in mind that the regulatory environment
had to evolve to cope with the growing sophisticated system.Changes in the
regulatory environment are altering the playing field. According to Deloitte "
Evolving Models of Retail Banking Distribution"written by Deloitte Center for
Banking Solutions, many recent regulatory changes were designed to foster
innovation and enhance efficiency in the payment system. The implementation of
Basel 2 focused primarily in capital adequacy, this development likely led or will
eventually lead to differential pricing by product and channels because of strategies
implemented to try to attract certain segments of customers. Also, the infrastructure
that banks create to comply with Basel 2 will provide retail banks with enriched
insights into their books of customers behaviour.

this is all i came up with. feel free to make

corrections and additional information . thank you