Full Form of BFSI:
Banking, Financial Services and Insurance
BFSI Full Form is Banking, Financial Services and Insurance. BFSI refers to an industry term used in respect of those companies that make provision of a range of financial products such as universal banks. BFSI generally consists of insurance companies, commercial banks, cooperatives, non-banking financial institutions, mutual funds, pension funds, and other financial entities. Banking for the purposes of BFSI may include retail banking, corporate banking, private banking, core banking etc. Financial services include payment gateways, stock broking, mutual funds, etc. Insurance for that matter includes both non-life and life.
The term BFSI is generally put to use by Information technology enabled services (abbreviated as ITES) or Business Process Outsourcing (abbreviated as BPO) or Information Technology (abbreviated as IT), etc that undertake the management of data processing, software development, and application testing. The BFSI industry faced serious crises during the 21st century especially from the Subprime mortgage crisis in the United States of America and the Great Recession that started in the year 2008 and ended in the year 2009, causing severe setbacks to the industry. Recent reports suggest that the BFSI industry is now scaling up and is on the road to recovery.
There a few challenges in the BFSI which include; (1) For banks, there are challenges relating to penetration of their services in rural areas and maintenance of asset quality. There are challenges relating to lack of technology adoption and improvement of risk management framework. (2) For Insurance companies, there are issues relating to pricing of risks, penetration in rural areas, and untouched potential of Pension market among many others. (3) For Mutual Funds, there are problems relating to low levels of awareness among customers, inadequacy in the reach of funds, and the existence of multiple regulatory frameworks.