An understanding of trends is useful for the deal makers seeking opportunities from financial services market. These trends in financial services offer the world’s leading bankers, lenders, brokers and insurers the data-driven insights that are needed to guide their strategic digital marketing decisions.
The U.S financial sector was in turmoil in 2007 due to the wide recession in the world economy. Many of the new policies that have taken by the effects of recession are directed towards financial institutions. Let us know the trends in the US financial service industry contributing to the value added or total gross domestic product and the distribution of this income between the shareholders and the labors.
The “value added” of the financial sector measures the value of the services provided by this sector to the overall economy. Shareholder income is the leftover income of value added after covering for labor costs, corporate tax, and investment expenditure. The shareholder income decreased dramatically during the early 1960’s followed by a two decade stagnation. Later it experienced an unprecedented growth from the mid-1990’s to the present. By 2007, this share had risen to twice its previous high point.
Perhaps the most interesting point is that the labor share for financial corporations have rose in the financial crisis. It increased by 44% in mid-2007, reaching a record high by the end of 2008. Labor compensation did not change much while value added declined drastically. The U.S. financial sector has increased substantially during the past five decades. Growth between the years 1995-2006 certainly led to high shareholder returns, whereas, labor compensation returns in the financial sector were also dramatically high at the onset of the financial crisis.