Planning for the Future

What do we mean by financial services?

The financial market place is a dynamic environment that thrives on innovation, competition and change for its success. Not only are the distinctions between banks, investment institutions and insurance companies becoming increasingly blurred but now it seems everyone is getting in on the act. Loans, credit cards, mortgages and insurance products are all now available from a variety of high street stores, supermarkets and Internet sites.

As an industry, financial services is a major employer and earner of income from both UK and overseas business and in 1998, the industry contributed roughly £46.2 billion to gross added value (GAV) in the UK. This accounted for 6.1% of the total income for all industries. The figure was made up of £28 billion from banking and finance, £12.8 billion from insurance and pension funds and £5.5 billion from auxiliary financial services like fund management. In comparison, the manufacturing industry contributed £151.2 billion (20%).

The financial services industry is becoming increasingly global with London established alongside New York and Tokyo as a leading world financial centre. The growth of e-commerce is likely to transform the industry even further with technology already enabling new ways of delivering financial services and products to consumers through the Internet, digital TV and WAP phones, where the UK is a world leader. E-commerce could soon mean time zones are no longer a barrier to business with consumers able to buy what they want, when they want through whatever medium suits them best.