Financial Management and its importance in financial services industry

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July, 2019

The 5 Keys To U.K. Digital Bank Monzo's Success In The U.S.- Forbes June 2019
Cyber Command searching for financial management system – Fedscoop July 2019
BNP Paribas Partners With Fintech Startup OneUp To Automate Cloud – Forbes July 2019

 

Financial Management is a vital activity in any organization. It is the process of planning, organizing, controlling and monitoring financial resources with a view to achieve organizational goals and objectives. Without it, banks or corporates may overstretch and fail for the wrong non-business reasons or miss out on great opportunities for growth. The three main types of financial management decisions are capital budgeting, capital structure, and working capital management. A business transaction that would include capital budgeting affects if a company or bank consider branches expansion.

 

In fact, one area affecting Financial Management decisions for banks is Fintech and Digital capabilities, as in the case of a fully digital bank such as the UK’s Mondo or whether a major high street bank opens new branches or reduces the number of physical branches in favor of digital offerings.

In Singapore, traditional branches seem to be disappearing into the ether and this is mirrored across the region. And whether you are a corporate institution or a bank (big or small), good financial management is a must before you even think about any strategic planning for your business.

In addition the new wave of challenger banks and other Fintech companies are offering financial services that are easy, quick and free. Some of the digital banks offer financial management services for free as an example.
As banks are doing in this and in many areas of their service offerings, some are partnering or buying Fintech companies to develop their services. For example, BNP Paribas, Europe’s largest bank by assets, to transform its traditional banking services (online payments, money transfers, mobile banking…). It offers to 585,000 small business customers in France into a complete and automated accounting and financial management platform.

A good example for an institution looking for help is U.S. Cyber Command, which has openly announced it needs help managing its money. A recent solicitation seeks information on financial management systems that could track funding past, present and future for the Department of Defense’s unified cybersecurity arm. The system Cyber Command is looking for would be extensive, with requirements ranging from managing civilian pay to budget estimates.

Banks need to innovate in services they offer to remain relevant to their clients and remain in pole position to manage all their financial needs. If you have any intention of offering financial services to consumers, your staff need to understand good financial management basics so they can talk with clients confidently and knowledgeably.

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