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Evaluate the implications for financial service providers to adapt to evolving current factors and trends.

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Introduction

Transfer-Encoding: chunked I am currently working as a trainee journalist for ITV and I have produced articles them and researched and provided production for the financial services in the UK. Word is getting around about my knowledge and understanding and the FCA has invited me to address its members. Following my research, I am now going to produce a report evaluating how changes might affect things like employment, products and marketing. I will evaluate the implications for financial service providers to adapt to evolving current factors and trends. Demographics are likely to have impact on financial services provision. In the UK we have an ageing population problem and this has implications on the provision of pensions. Life expectancy for men is 78 and for women is 82. However, if you reach 65, it increases to 84 for men and 86 for women. Because we have an aging population it means people are living for much longer and puts strain on the government because they are forced to pay state pension which is £155.65 a week for a longer period of time. A change in demographics will change the provision of state pension. ...read more.

Middle

Furthermore, low inflation will have impact upon financial service provision. This has implications for endowment policies returns and retirement annuity rates; these policies can be linked to the rate of inflation which is currently 0.5% in the UK. If the rate is very low like it is currently, it means the monthly payments are not going to rise and therefore the returns will be fairly low in time to come. However, if the inflation rate is higher, the monthly payments will go up. If you pay more, the returns will be higher. The change in inflation will effect endowment rates policies and retirement annuity rates. If it increases your monthly payments will increase and will be good for you as you can then get a higher return in time to come. However, if the rate is low then you pay less and do not get a high return on your endowment policies and retirement annuity?s. These products are very good for the customer although if there?s low inflation then it will negatively affect the return. As a result of technological developments we now have many goods and services that can be purchased online. ...read more.

Conclusion

The credit crunch started in the USA and banks were providing loans and mortgages to unreliable borrowers who has low credit history and income and they couldn?t pay is back. The government had to then pay the banks out with tax payer?s money. The state of the economy will effect financial services. If there is a boom period more people will want to save money and take out loans and mortgages however after the credit crunch, it will be hard to obtain one. Customers will need to go through many checks to ensure that they will be able to repay the bank in the future and many banks may decline loans or mortgages and so that the banks and building societies are not in danger of a similar issue like the credit crunch. This may negatively affect banks and building societies because many customers may be put off by the many checks on their accounts but perhaps it?s better because the extra checks will reduce the risk on the banks and building societies which is good. In conclusion, there are many factors and trends likely to impact upon financial services provision over the next five years in the form of demographics, nature of work, financial inclusion, low inflation, technological developments, distribution channels, innovation and new products and lastly the credit crunch. ...read more.

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