The changing landscape of demand for financial services

The decline of the welfare state has created an increasing level of awareness by individuals that the well-being—current and future—of themselves and their families is more in their own hands and less in the hands of the state. This development has created a breed of consumers that demand anytime-anywhere delivery of quality financial services. At the same time we have witnessed an increased sophistication of the consumers in terms of the financial products they buy and the channels of service delivery they use. These trends are universal among developed economies, from the advanced and traditionally liberal economies of North America, to the increasingly deregulated economies of the European Union and pre-accession States, and the post-Communist countries. 

The numbers are telling In the 1980 s almost 40% of the U.S. consumer financial assets were in Bank deposits. By 1996 bank deposits accounted for less than 20% of consumers financial assets with mutual funds and insur-ance/pension funds absorbing the difference (Harker and Zenios, 2000, ch. 1). Similar trends are observed in Italy. The traded financial assets of Italian households more than doubled in the 5-year period from 1997, and the bulk of the increase was absorbed by mutual funds and asset management see Table 19.1. 

These statistics reveal the outcome of a changing behavior on the part of consumers. What are the changing characteristics of the consumers, however, that bring about this new pattern of investment The annual Household Savings Outlook (2001) provides important insights. First, the traditional distinction between delegation of asset management to a pension fund Board or an insurance firm directors by the majority of consumers, and autonomy in the 

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