Financial Services: a Synonym for Lifestyle Quality.
Financial markets perform the economic function of channelling resources from customers who have an excess of resources to those who have a shortage of funds due to large spending. As Mishkin (2002) states, over time, financial services have developed into a big business, both for financial institutions, on one hand, and for the consumers of financial services on the other hand. Rose (1997) argues that the financial system of the UK and US currently comprises many different types of private sector financial institutions which include banks, mutual funds, financial corporations, investment banks, insurance companies, trusts and many others.
All of these institutions deal with various financial services and contribute to the quality of consumers’ lives. The range of financial services is literally unlimited nowadays, and consumers are able to obtain the most favourable terms in insurance, deposits, borrowing, consulting, investments in various kinds of securities and many other services. Various aspects of financial institutions’ role for the consumers in relation to investments were touched by Bodi et al (2002), Robinson (1990), and Stoll (1990). Khoury (1990) mentions that deregulation of financial institutions caused the increase in the range of services which they are able to offer for their customers, particularly in the case of the US.
The quality of people’s life is directly connected with the number of financial services which they are able to obtain. Access to financial resources enables them to make purchases in the shortest time owing to the loans from banks and non-banking institutions. Consumers are also able to invest surplus money into all kinds of assets which can bring large profits, as well as obtain insurance for their cars and homes. Financial institutions facilitate their possibilities for increasing their level of life in the shortest time. The market of financial services in the UK and US has already reached its peak but new services are still being introduced by financial institutions in order to meet the increasing demand. Every current innovation in the field of financial services makes a large contribution into the level of life in a particular country and global economy on the whole. As Smithson (1998), Wilmott (2001) argue, one of the most successful recent innovations of the financial market are derivatives which help to reduce the risk of uncertainty.
This paper aims to give the analysis of the rapid ascent of financial institutions into a viable and profitable business and their impact on the quality of life of the UK and US citizens. The objectives of the research include:
oDeep analysis of the financial institutions evolution;
oIdentification of the range of financial services which are being offered to consumers in the UK and US;
oDetermination of the major aspects of consumer life style in the two countries and their characteristic features;
oConfirmation of the connection between the variety of financial services and the quality of consumer’s lives with the help of research methods;
oIdentification of the key financial services which have the largest impact on the level of life of consumers and discussion of opportunities for their development in the future.
The purpose of research methods use is to obtain information relevant to the testing of the hypothesis that the availability of a wide range of financial services leads to the increase in the quality of consumers’ lives. The research provided in the paper is based on the principles of the application of quantitative and qualitative methods; the use of primary and secondary data; the reliability and validation of results; the role of triangulation to reduce bias, misinformation and inaccuracies in study results; and lessons learned through piloting and pre-testing of results in anticipation of a broader sampling. Subsequently, with an assessment of the immediately preceding issues, results are presented for the three (3) research methodologies chosen for this study: (1) questionnaire; (2) focus group discussion (discussions with people connected with finance and banking; and (3) interview with an expert on finance and banking. Finally, an overall conclusion of the effectiveness of the three research methodologies and suggestions for further study are presented.
1. Benninga Simon. Financial Modeling.- The MIT Press.- 2001.- 622p.
2. Bodi Zvi, Kane Alex, Marcus Alan J. Investments.- McGraw-Hill.- 2002.- 1015p.
3. Brealey R.A., Myers S.C. Principles of Corporate Finance: Irwin McGraw-Hill.- 2000.- 1093p.
4. Clark Francis Jack, Toy William W. The Handbook of Equity Derivatives.- New York: John Wiley & Sons, Inc.- 2000.- 696p.
5. Dillon, J. T. The practice of questioning. New York: Routledge. 1990.
6. Eales Brian. Financial Engineering.- New York: St. Martin Press.- 2000.- 292p.
7. Gastwirth Joseph L., Sinclair Michael D. On Procedures for Evaluating the Effectiveness of Reinterview Survey Methods: Application to Labor Force Data. Contributors: Journal Title: Journal of the American Statistical Association. Volume: 91. Issue: 435. 1996.
8. Khoury Sarkis J. The Deregulation of the World Financial Markets: Myths, Realities, and Impact. Quorum Books, 1990.
9. Mishkin Frederic S. The Economics of Money, Banking, and Financial Markets, 6th Ed.- Addison Wesley.- 2002.- 737p.
10. Robinson James D. Iii. U.S. Financial Services in the Global Economy. Business Perspectives, Vol. 3, Summer 1990.
11. Rose P. Commercial bank management. Irwin. 1997.
12. Smithson Charles W. Managing Financial Risk: a Guide to Derivative Products, Financial Engineering, and Value Maximization.- McGraw-Hill.- 1998.- 663p.
13. Stoll Hans R. International Finance and Financial Policy. Quorum Books, 1990.
14. Wilmott Paul. Paul Wilmott Introduces Quantitative Finance.- John Wiley & Sons, Inc.- 2001.- 521p.