The major key suppliers of the funds within the financial institutions are the individuals, businesses as well as the governments. The groups of individuals are the actual suppliers of the funds to the financial institutions. The firms will even invest their money within these financial institutions and even some times when necessary they will even borrow the money from these financial institutions. The different types of the financial institutions are the commercial banks, the, mutual funds, security firms, the insurance companies as well as the pension funds.
Financial institutions have dramatically expanded their retail customer base with over 20 percentage annual growth rates for the last five years. Unfortunately for these institutions, customer loyalty has not kept pace with growth in the underlying customer base. In fact, in the last four years banks have seen loyalty levels drop by almost 40 percentage points. While most institutions claim to care about excellent customer experience and promise as much in their marketing campaigns (Alok Kshirsagar & Renny Thomas, 2011)
The commercial banks will gain all their funds by means of allowing the deposits from the investors. The investors of the commercial banks are the individuals, the firms as well as the government companies which are ready to invest more and more cash and having huge amounts with them.
The mutual funds will trade their entire shares to the individuals and will group these funds and will invest them in the securities. The mutual funds are of three types such as the money market mutual funds group which will receive the funds from the independent investors in order to invest them within the money market securities which are been granted by different types of firms as well as the financial institutions. The second one is the bond mutual funds group that will get the funds from the investors in order to invest them within the bonds and finally the stock mutual funds group that will get the funds from the investors to invest them in the stocks. The mutual funds are possessed and controlled by the investment companies.
The investment banks, investment companies as well as the brokerage firms will come under the securities firms. These securities firms will provide their support as the financial mediators in different aspects. They will play an investment banking role by offering the placing securities such as the stocks and the debt securities which are been granted by the firms or else the government agencies.
Several types of insurance policies are offered to the customers by the different insurance companies which include the life insurance, property insurance, health insurance as well as the liability insurance. They will get the periodic payments from the policy holders and group payments.
The pension funds are the type of funds that are received from the employer or else the employees of a particular company, in order to benefit them the companies will offer these pension funds to their employees. These funds are been invested in the debt securities which are granted by the firms or else the government agencies as well as the in the equity securities that is been granted by the firms.
The additional financial institutions will provide their support in the form of the significant intermediaries or mediators.
Deposit Type Institutions
The deposit types of financial institutions are transacted in the form of daily basis. These deposit type institutions will include the commercial banks, savings and loan associations, the mutual saving banks as well as the credit unions. In order to lend the money to the borrowers these institutions will collect the deposits from the savers. This money will earn more interest to the saver who saved their money in the savings account.
The companies included in the non deposit institutions are the insurance companies, investment companies, the mortgage companies as well as the finance companies. These non deposit companies will get the financial services from the established companies.
Problematic Financial Businesses
The problematic financial businesses will include the companies such as the pawnshops, the payday loans, rent to own centers as well as the check cashing outlets. These companies will offer the financial services with high prices.
These financial institutions are capable of helping the individuals in managing his financial wants and needs.