What drives interest for financial services in developing markets? Policy-friendly central government, key initiatives such as Housing-for-All, impetus on the infrastructure sector, young demographic dividend, and high disposable income have driven the India growth story in the past decade. Today, India provides a huge potential market for top banks, insurance companies, and asset managers who are looking at expanding their business frontiers. Financial services providers have played an important role in driving investment in India. Private financial services players, which include foreign banks and insurance companies, have started finding good expansion opportunities in India. This is despite the continuing dominance of state-owned financial institutions in India’s banking industry and capital markets. The market share of foreign banks is much smaller compared to the local peers, with their main focus being M&A advisory services and trade finance. That said, foreign banks have made good headway into the Indian markets despite regulatory restrictions, largely through de novo expansion. Going forward, foreign banks will likely create wholly-owned subsidiaries with the regulators focusing more on reducing systemic risk.
What drives interest for financial services in developing markets
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