Saturday, June 28, 2008

Personal financial services market analysis - June'08 round up

Today' blog is all about summarizing my findings in the personal financial services in the Indian consumer market place. Though the scope of my research has been quite small but i have tried to cover different types of service providers which should be able to give you a very high-level picture of the current market place in the financial services segment.

Executive Summary:

Financial services market in India has been growing in leaps and bound for more than over a decade now. With the bull run of 2005- 2007, there has been an increased awareness in Indian consumer market which has positively responded to various products and services launched by Financial Houses. The average Indian consumer has been saving his money in traditional instruments like PPF, Post office funds, Bank FDs, Gold etc and has been averse to investing money in modern day financial instruments. All this is slowly changing now with the advent of technology in investment and banking services. The financial service companies have leveraged the power of internet and have come up with web based services to educate the consumer to the world of personal financial planning and investment services. Though these web sites are heavily focused on investment services and have more or less content related to investment instruments like Mutual Funds, IPOs, Stocks etc, there is still a whole bunch of those who provide tips on "How To Dos" for various aspects like retirement planning, Life Insurance, Wealth management etc.

Service Provider Overview:

The key financial service providers in the Indian space can be classified under the following categories:
A. Brokers or intermediaries like personalfn.com, moneyline.com, sharekhan.com etc.
B. Public and private banks like ICICIdirect.com, hdfcbank.com
C. Digitial media houses like moneycontrol.com (CNBC India), ndtvprofit.com etc.
D. Print media houses like financialexpress.com, economictimes etc.
E. Fund houses like fidelity.co.in, franklintempleton etc.

Key Offered Financial Services:

A closer look at financial services reveal that the current services offered by various web sites include:

A. Personal financial planning (limited to giving advises in the form of articles and online calculators)
B. Market Updates - news, reviews, day trading, fund buy/sell advisory
C. Mutual funds - news, analysis, online purchase
D. Market Research and Analysis - Research on long, mid or small cap funds
E. Online portfolio management - register portfolio, track transaction history, NAV tracker, stock ticker etc. This also includes tools like personal financial management both online as well as as softwares.
F. Financial Advisers - Access to financial consultants through retail outlets or through a network of business affiliates
G. Knowledge center - Access to a database of articles on various aspects of financial planning ranging from personal finance to investment services in "How to do" kind of formats.


Market Opportunity:

There is still a lot of room for improvement and innovation like developing true personal financial management softwares which can enable an average consumer to plan his monthly and yearly budget. There is still a long road ahead before Indian consumer will truly gain the financial wisdom to understand and leverage the power of financial planning. Till then financial services will need to evolve and grow to reach out to end consumer in different ways.

References:
moneycontrol.com
equitymaster.com
Outlookmoney.com
myiris.com
itrust.com
moneyline.com
sharekhan.com
NDTVProfit.com
personalfn.com
icicdirect.com


Disclaimer:

I have made every reasonable effort to ensure that all information in this report is correct based on secondary market research. I assume no responsibility for any inadvertent errors.

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