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Banking, financial services and insurance (BFSI) is an industry term for companies that provide a range of such financial products/services, such as universal banks. BFSI comprises commercial banks, insurance companies, non-banking financial companies, cooperatives, pensions funds, mutual funds and other smaller financial entities.

Banking may include core banking, retail, private, corporate, investment, cards and the like. Financial services may include stock-broking, payment gateways, mutual funds etc. Insurance covers both life (living) and non-life (non-living).

This term is commonly used by information technology (IT)/information technology enabled services (ITES)/business process outsourcing (BPO) companies and technical/professional services firms that manage data processing, application testing and software development activities in this domain.

The global BFSI Industry faced serious turmoil during the early 21st century, when a series of crises like the subprime mortgage crisis in the US, and the Great Recession worldwide, that began in Q3-2008 and ended in Q1-2009, gave a huge setback, resulting in negative growth. However, reports [1] say that the industry is now coming back on track, and is gaining pace on a path of recovery.

Key challenges in BFSI


  • Increasing the penetration of banking in rural areas
  • Tackling demand-supply mismatch
  • Credit disbursement to the priority sector
  • Maintaining asset quality
  • Improving risk management mechanism
  • Technology adoption


  • Need for accuracy in pricing of risks
  • Rural market still under-penetrated
  • Pension market remains untapped

Mutual funds:

  • Low level of customer awareness
  • Inadequate reach of funds / distributors to retail investors
  • Limited innovation in product offering
  • Multiple regulatory frameworks


  1. ^ [1]