Financial markets are designed for the purchase and sale of financial items such as stocks, securities, shares, and bonds. It makes it simpler for those in need of funds to get in touch with those looking to invest. Financial markets provide a setting where all participants, regardless of their size, will receive equal treatment. It helps to lessen the unemployment rate because of all the employment opportunities it offers.

Fintech(Financial Technology), aims to enhance and automate the provision of financial services. Certain software and artificial intelligence in fintech assist businesses, and individuals in managing their finances in a better way. Several positive measures taken by governments around the world are fostering the growth of fintech.

If you’re interested in finance, keep reading to learn more about the financial market. 

What is traded in financial markets?

Financial instruments like shares, bonds, and mutual funds are traded in the financial market. 

1. Shares- To profit from your investment, purchase shares to sell them back at a high price. Volatility is the continual fluctuation in share prices. Profits in stock market trading are made feasible by volatility. 
2. Derivatives- Financial contracts known as derivatives are made between two or more parties and draw their value from an asset or collection of assets.

It increases the potential risks and rewards for the people involved in this. 

1. Bonds- Bonds guarantee a specific interest rate by a specific date, making them a safer investment. Although the interest may change, it will never go below the rate that is specified when the securities are offered on the stock market. 
2. Mutual Funds- The mutual fund consists of stocks, bonds, and other assets, which are traded in the financial market. The risk is far lower than stock trading since it requires several participants to make investments in various stocks. 

Types of financial markets 

The following are the various types of financial markets in an economy- 

1. Stock Market– Shares of various companies public as well as private are traded here.
2. Bond Market-Investors buy bonds from an organisation in the bond market, and the company pays back the principal and interest on the bonds over a stipulated period.
3. Derivatives Market– In such a market, derivatives or contracts are traded, the value of which is determined by the market forces. 
4. Cryptocurrency Market– Blockchain technology is used for transactions. Digital currencies are traded on an international scale.
5. Foreign Exchange Market-  This market aids in carrying out currency transactions and is used to establish exchange rates for all currencies.

Importance of financial markets

The following is the benefit of having a strong financial market in an economy –

1. Productive use of savings- Financial market helps in the mobilisation of savings. They use the available savings for various productive purposes like home loans, student loans, etc providing easy access to capital for various entities.  It contributes to the capital and economic growth of the nation. 
2. Stock Valuation– Pricing various stocks and securities is another crucial task in financial markets. Demand and supply in the financial markets, as well as the interactions between investors and other shareholders, essentially set these prices.
3. Asset Liquidity– Liquidity is necessary for tradable assets’ efficient operation and flow. Financial markets not only make it simple for investors to sell their securities and other investments, but they also make it simple to turn those assets into cash.
4. Altering the transaction costs- Financial markets allow for the free acquisition of a variety of information on securities. There is hardly any additional fee required for buying and selling financial instruments which adds to the benefit. 

Entities Involved

This system draws money from investors and routes it to businesses, enabling businesses to finance their operations and experience growth. The two sides of the entire process are-

Lenders:

Name	Function
Individuals	They lend money by investing in government bonds, saving money in bank accounts, or paying premiums for insurance.
Companies	When they have excess income that won’t be needed for a short while may try to make money by lending it through money markets, which are platforms for lending short-term funds.
Banks	They lend out the money already deposited with them to create more of it.

Borrowers:

Name	Function
Individuals	They take loans for short-term and long-term financing.
Firms	They take loans to expand their firm eventually.
Government	They usually borrow to meet the fiscal deficit of the nation or finance some public projects.

Fintech reshaping the future of financial markets

The future of finance is being redefined by fintech, which is the use of digitalisation in financial services. The growing digitalization fosters economic growth by generating more efficient and inclusive financial services. Due to artificial intelligence in fintech, the boundaries between financial entities and the financial sector are becoming increasingly blurred.

It has the following implications on the financial markets-

• Promote healthy competition and innovation while minimising risks.
• Examine regulatory, monitoring, and supervisory frameworks to make that they are still appropriate for the job and help the government promote a secure, effective, and inclusive financial sector.
• To promote competition in the financial industry, anticipate market trends, and proactively influence them.
• As private investment solutions evolve quickly, make sure that public money is still suited for the digital age.

Conclusion

Financial markets are the base of an economy and fintech is the new-age definition of that. It looks forward to creating new opportunities for various identities to prosper in their businesses. 

If you are looking to learn fintech and related financial services, check out the new MBA in Fintech training programme offered by Imarticus Learning in collaboration with KL University.  

Financial markets are an essential component of the global economy, as they facilitate the efficient allocation of resources and the efficient sharing of risk. This article will provide an overview and cover topics such as the types of markets in India, their significance, and their challenges. 

Moreover, the article will include a discussion of the government policies that have been put in place to facilitate the functioning of the financial markets in India. 

Introduction

Financial markets refer to the various mechanisms and institutions through which investors can buy and sell financial instruments such as stocks, bonds, commodities, and derivatives. These markets provide a platform for investors to manage their financial portfolios and move the capital from one asset class to another. 

India’s markets have grown significantly in recent years, with the country’s stock exchanges, banks, and mutual funds all expanding rapidly. The Indian markets are subject to domestic and international regulations and the influence of global economic and political forces.

Moreover, the Indian mutual fund industry is the fastest-growing in the world and has seen an increase of 5 fold spanning 2012 and 2022. The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) support more than 6,500 listed companies. 

How Do Financial Markets Function in The Indian Economy

Financial Markets are India’s primary sources of capital formation, providing funds for economic investments. The role of financial markets can be summarised in the points below.

1. Financial markets facilitate efficient capital allocation by providing a platform for investors to purchase and sell financial assets like stocks, bonds, and derivatives. 
2. These are an essential source of capital for businesses, allowing them to raise funds for growth and expansion. 
3. These provide a way for governments to raise capital for public investments and to manage their debt. 
4. These markets enable businesses and individuals to risk by providing a way to hedge against adverse price movements. 
5. Financial markets advertise the efficient transfer of savings from savers to investors, allowing for economic growth. 
6. These markets provide a platform for companies to issue and trade securities, facilitating corporate governance and providing information to investors. 
7. These markets offer pricing information, which helps investors assess the value of assets and make informed decisions. 
8. These markets promote economic stability by providing liquidity to markets during times of crisis. 
9. These markets pave the way for investors to diversify their portfolios, reducing the risks associated with investing in a single asset. 

Challenges Faced by Indian Financial Markets

One of the most challenging encounters faced by the Indian markets is low levels of financial literacy. It creates an imbalance in the market, leading to the miss-selling of financial products and services. Apart from this, other factors contribute, such as:

1. Volatility: The Indian markets are highly volatile, making it difficult for investors to predict future trends.
2. Poor Liquidity: Low liquidity in the Indian markets makes it hard for investors to buy and sell shares quickly, leading to price volatility.
3. Lack of Transparency: The Indian financial markets lack transparency, making it difficult for investors to make informed decisions.
4. Lack of Regulatory Oversight: A potent regulator is needed to protect their investments.
5. Poor Infrastructure: Poor infrastructure in the Indian financial markets makes it difficult for investors to access reliable and up-to-date data.
6. Taxation: High taxes and complex regulations make investing in the Indian markets costly.

To Sum Up

The financial markets of the Indian economy are significant for the country’s economic development. Providing liquidity to the markets enables companies to finance their operations and investments and improve their productivity. The Indian financial markets are highly regulated by the Securities and Exchange Board of India (SEBI). 

This regulatory body ensures that the markets are transparent and secure. It also sets the rules and regulations that govern the conduct of the markets, such as the listing and trading of securities. Moreover, SEBI is responsible for developing the markets, such as introducing new products and services and taking measures to ensure investor protection.

In recent years, the Indian markets have undergone significant changes. They have become more transparent, efficient and well-regulated. It has increased the flow of capital into the Indian economy, allowing businesses to expand and improving economic growth.

In conclusion, the markets in the Indian economy are of great importance for economic development. They are highly regulated, efficient and accessible to a broader range of investors. They facilitate capital formation, enabling companies to finance their operations and investments and improving economic growth. It has made them a crucial part of the Indian economy.

Why Choose An MBA in Fintech

An MBA in Fintech training program is an excellent choice for those looking to develop their financial knowledge and skills. Learn Fintech in one of the highest-grossing courses offered by Imarticus in collaboration with KL University. 

By pursuing an MBA in Fintech, you will gain specialised knowledge and skills which will equip you to become a leader in the ever-growing world of finance. 

You will gain an understanding of the latest technological advances and how they can be applied to the financial industry. Additionally, as the financial sector is becoming increasingly complex, an MBA in Fintech will give you the skills necessary to stay ahead of the competition.

Fintech or finance technology is the new trend in the field of commerce and industries. Fintech is the use of information technology (IT) in the field of finance, thereby giving it a cutting edge over traditional, or most accurately defined, physical financial services. Though the concept of Fintech was known earlier, it was the double dose of demonetisation and global lockdown, at a later stage that provided Fintech with a solid boost. Professionals started taking an interest to learn fintech as a subject. The concept of Fintech may be easily understood when we examine a few common banking or commercial services like paying our next-door grocery shop, online utility bills, transferring funds within little or no time, or even purchasing insurance or a life or health policy. As Indians, we should take immense pride that today Fintech has occupied a major usage share in the domain of financial transactions.  

This modern technology has helped customers and Fintech firms alike. Fintech has reduced transaction costs and time significantly. The customers may now have 24-hour call centre support over phone banking, which has also become an integral part of Fintech.

The interest tolearn financial services does not come without its own set of new challenges, which also plague the domain of finance. The fraudsters are eyeing to make the system vulnerable for their personal benefit. On one hand, cyber security experts are trying to make the domain more and more secure. The usage of multi-layers of authentication, CVV and OTP has made the server safe. However, the user needs to be aware and stay alert all the time so as not to fall prey to the hands of unscrupulous brains.  

Career in Fintech

A career in fintech is very lucrative both in terms of innovation, challenges, creativity, and compensation. Large Indian and overseas multinationals keep on hiring Fintech professionals at various levels. This necessitates the study of an MBA in Fintech. Out of the known names, K L University (KLU) is a reputed educational institute that offers students this highly compact and practical course. The course is partnered with guest faculties from industries so that the students get an edge over other similar courses. It needs to be placed on record that 100% of students passing out of KL University have job assurance records as of date. 

It may be noted that a strong background in finance or commerce is the essence of this career and its first and foremost requirement. In India, IT graduates have completed their MBA in finance to choose Fintech as their career goal. However, it may be the other way, as well. Commerce graduates can also join MBA in a Fintech training program to fulfil their goals.

Students must master the following subjects to become future professionals:

• Financial markets and services
• Applied mathematics and statistics
• Banking and risk management
• Basics of artificial intelligence, machine learning and data science
• Fintech
• Digital know-how and transformation
• Investment banking and portfolio management
• Financial modelling
• Corporate restructuring (merger, acquisition, etc.), business valuation and hidden potential estimation.

Depending upon the strength of the skills they have acquired during their study, prospective candidates have the following choices for their career as a Fintech professional:

• App Developer for third-party payment wallets
• Quantitative Analyst and Data Scientist
• A career in Edutech organisations
• A career in Fintech companies that deal in overseas multi-currency transactions including bitcoins
• Cyber security experts in banks and non-banking finance companies
• Compliance Officers
• Risk Control Managers
• A career in investment banking
• Financial Analysts
• Blockchain Developers  

The beauty of an MBA in Fintech program is that it welcomes students both from the finance and IT domains. A commerce graduate and an IT graduate are equally eligible for the course provided the commerce graduate has an inherent interest in the application of technology and similarly, an IT graduate should have great interest in the subject of finance. However, graduates from other streams are also welcome in this MBA course. In such cases, it may be noted that the aspirants must absorb the nuances of both finance and technology simultaneously within the given duration of the course. The syllabus of the course has been designed in a way that enables the professional to take all future Fintech challenges in the industry. 

Conclusion

Nowadays technology has become an integral and inseparable part of the finance business and marketing, as well. The application of data analytics has given a shot in the arm of the industries, which they may use to derive useful market predictions in finance. The viability of a business may be obtained by using Fintech. The whole gamut of financial activities may be also protected from cyber fraud by using technology.

Top industries that use Fintech in a smart way are banking and finance, healthcare, insurance, IT services, manufacturing, pharma, fast-moving consumer goods (FMCG), consumer durables (CD) and retail. The MBA in Fintech by KL University at Imarticus has a 100% job assurance record. This course will help you achieve your dream.