What are Consumer Financial Services?

‘Consumer financial services’ is a term that is thrown around a lot in financial-speak but is seldom ever explained thoroughly. From th...


‘Consumer financial services’ is a term that is thrown around a lot in financial-speak but is seldom ever explained thoroughly. From the common layman to the seasoned businessmen, more people both inside and outside the finance industry should get to grips with that consumer financial services are, who provides them, and why they are important.

So what are Consumer Financial Services?

Consumer financial services can be defined as the areas in which banks, building societies, credit unions, and other finance bodies, assist customers and businesses with what their money does and where their money goes. This can be as simple as an individual who manages their personal account with their local bank or as complex as a large corporation who provides legal counsel in consumer financial services.

Once you realise that even you as an individual use consumer financial services every day, suddenly the term becomes that much more familiar. Even with this in mind though, why are these types of professional services important?

What Makes These Services Important?

Because we all rely on banks and other similar organisations within the financial sector, these services are very important. Not only would you have no bank account to access without them, the country’s economy wouldn’t be an economy if there were no consumer financial services.

Businesses, both large and small, rely on these services in a range of different functions, including, but not limited to:
  • Mortgages and lending
  • Providing new products and services to the public
  • Creating payment networks
  • Licensing new financial ventures
There are a range of loops an organisation must jump through to even provide these kinds of services to the public as we need to be able to know who we can trust with our cash. This is well illustrated with the emergence of Monzo, a new app which wants to operate like a bank but had to go through the rigorous process of acquiring all the necessary licenses.

Consumer Financial Services in the Future

The above example of Monzo cards is the direction that these types of services are going - digital. It all comes down to two main important elements, security and convenience.

Security is paramount to all things financial and in many ways going digital with our money will aid this. Blockchain technology is the next step for the security in terms of finance as it will allow us to all have a partial piece of control and accountability for the finances of everyone. This may be bad news for banks as come critics would argue that Blockchain will make banks obsolete; however, it is more likely that they will change to accommodate this new system.

Convenience is king in our modern world and the digitization of consumer financial services will certainly ensure this. Once again, when we consider the growing population of Blockchain and digital currencies like Bitcoin, payments that companies and individuals make will be instantly updated and carried out among all vendors and organisations through encrypted means.

Watch These Services Evolve Over the Next 5-10 Years

It’s an exciting time to be part of the finance industry with all of the fast-paced changes that are taking place even just in 2017. Be sure to follow how things unfold in the world of consumer financial services and the financial sector in general of the next decade or so.

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Vyas Infotech: What are Consumer Financial Services?
What are Consumer Financial Services?
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