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Saturday, 28 January 2023
Laughs at Sunak’s NFT, But Big Banks Are Serious – The Truth About the Financial Industry

Laughs at Sunak’s NFT, But Big Banks Are Serious – The Truth About the Financial Industry

2022-10-29

 

The financial services industry isn’t afraid of ridicule or mockery. On the contrary, these institutions view such attacks as a badge of honor, a sign that the industry is doing everything it can to help its customers while making sure it remains as far as possible from being a victim of its own success. It’s one thing to point out the sector’s excesses, its inefficiency, and the fact that it’s become excessively capital-intensive over the past few decades. It’s another thing altogether to mock it. In an industry as publicly scrutinized as the financial services industry, it’s not easy to remain above reproach.

Many in the industry have an unhealthy obsession with secrecy and with the fear of being outed as a result.

Sunak Fintech’s NFT: A Good First Step

According to one estimate, the total market size of the financial services industry is around $5.2 trillion. While this may seem like a large industry, it’s actually the 20th largest in the world, and it accounts for just over 1% of all consumer spending. By comparison, the financial services industry has a market capitalization of more than $6 trillion, which means it is much larger than the market capitalization of just about every other industry in the world. Making matters worse, financial services is one of the most regulated industries in the world. According to a report from the World Bank, regulation affects over half of all financial activities in the world, with the largest number of regulations affecting financial services.

This means that without regulation, there would be an estimated $8.6 trillion in risky assets sitting on the balance sheets of major financial institutions around the world.

The Dangers of Decentralized Financing

In a centralized financial system, a single point of failure is extremely costly – in both time and money.

A single bank or financial institution can go out of business, while another nearby can remain open and continue providing services. If you’re not at the right address, or if there’s a power outage, you may not be able to access your money. In decentralized systems, every financial institution is connected to every other financial institution, so there’s no single point of failure. If one bank goes out of business, the others can shut down, but not everyone’s connected to the outside world so they’re not at risk of going out of business, either.

 
 

J.P. Morgan’s 1-800 fraud

In May 2016, the British financial newspaper The Times reported that J.P. Morgan Chase & Co., at the time the second-largest bank in the U.S., used fraudulent activity to open as many as 2,000 bank accounts per day in 2012. The newspaper reported that the bank’s employees called themselves “accredited technicians,” which was meant to make them seem more professional than they were. However, the employees were actually playing a high-stakes game of financial roulette. The paper found that the average account belonged to a customer who had only had one financial product in his or her lifetime – a mortgage.

In total, the bank may have used 1,800 different customer identities to open these accounts.

The Financial Services Company Everyone Hates

The financial services industry has a long and storied history, dating back hundreds of years. It’s also a highly regulated industry with strict government oversight. But that doesn’t mean that the industry is without problems. In fact, the sector has a long list of issues, from red-flag financial products to high fees and poor customer service. The issues are well-documented, and each year the Financial Services Commission in Australia releases a report card on the sector, grading the performance of the major financial institutions in the country. The report card has become a kind of yardstick for benchmarking the industry, and it’s widely criticized for not going deep enough.

The Barriers to Entry

In the early days of financial services, people simply didn’t have the money to buy any kind of investment or insurance product. Fortunately, today’s market has changed, and all it takes is a few lines of code and a lot of hard work for an average software engineer to be able to launch a financial product. In fact, it’s not unusual for startups to go public in the financial services sector. The most famous of these is Wall Street’s BlackRock, which went public in 2009 and is now worth around $80 billion.

Because the industry is regulated and has a history of trust and reliability, it doesn’t have the same kind of stigma that other industries do when it comes to launching a financial product. But even if a startup were to go public, it would still face stiff competition in an industry where the number of firms is increasing exponentially.

Bottom Line

Despite the risks and challenges that the financial services industry faces, the sector has proven itself to be an invaluable part of the global economy. It provides important services such as international financial transactions, savings and loans, and credit, as well as insurance. The growth of the financial services industry has been a major driver of economic growth over the past few decades, and it will continue to be an important part of the future growth of the economy.The financial services industry has both strengths and weaknesses. It can be hard to research and evaluate due to the amount of regulation and the lack of competition in many parts of the industry. It’s also important to remember that this is a young industry with a lot of potential, but is also very risky due to its decentralized nature.

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