Services Innovation in Ireland - Options for ... - Europe INNOVA

2. Financial Services
Financial services cover a wide variety of activities targeted for consumers and businesses. Banking,
asset management, securities industry and insurance services are among the main activities of the
sector. This sector comprises establishments primarily engaged in financial transactions, that is,
transactions involving the creation, liquidation, or change in ownership of financial assets or in
facilitating financial transactions. They raise funds by taking deposits and/or issuing securities, and,
in the process, incur liabilities, which they use to acquire financial assets by making loans and/or
purchasing securities. Putting themselves at risk, they channel funds from lenders to borrowers and
transform or repackage the funds with respect to maturity, scale and risk.
Similarly, the insurance sub-sector is primarily engaged in the pooling of risk by underwriting
annuities and insurance. They collect premiums or annuity considerations, build up reserves, invest
those reserves and make contractual payments. Fees are based on the expected incidence of the
insured risk and the expected return on investment.
The Finance and Insurance (NAICS 52) sector is comprised of the following sub-sectors:
• Monetary Authorities – Central Bank (NAICS 521).
• Credit Intermediation and Related Activities (NAICS 522).
• Securities, Commodity Contracts, and Other Financial Investment and Related Activities
(NAICS 523).
• Insurance Carriers and Related Activities (NAICS 524).
• Funds and Other Financial Vehicles (NAICS 526).
The financial services sector is said to be the largest industry sector in the world with a total market
capitalisation in the region of $2,300 billion. Globally there are estimated to be approximately 15,000
financial services institutions employing in excess of 10 million people.
3. SCM-logistics
Supply chain management can be defined 120 as the process of:
"…managing the physical flow of product and related information flow through the whole
organisation from procurement of raw materials, through manufacturing to delivery to customer, in
an integrated way to provide better service at lower cost".
By contrast, the logistics sector has traditionally been associated with the physical distribution of
materials and information within the supply chain, from inputs, through to finished products but
while logistics can be viewed as a relatively narrower concept than supply chain management,
the sector is rapidly evolving from the position of a support activity to business functions such
as manufacturing and marketing, towards an integrated service offering covering areas such
as warehousing and transportation activities, purchasing, distribution, inventory management,
packaging, manufacturing, and customer services. In this respect, the boundaries between supply
chain management and logistics (SCM-logistics) are increasingly blurred.
While many supply chain and logistics activities are undertaken ‘in house’ by companies,
an external sector based around the provision of such services has grown significantly. This sector
broadly incorporates:
• International, integrated logistics providers.
• National transport/logistics providers.
120 IBEC-CBI. 2002. ‘Supply Chain Logistics and Transport on the Island of Ireland: an Integrated Study’, Report prepared for InterTradeIreland.
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