Analysis of the Financial Service Industry and Square Inc.

Square Inc.
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Abstract
Square Inc. is a company responsible for digital payments and financial services. It operates in different countries with different political ideologies, thus heavily impacting its position. The company faces political pressure regardless of democracy and other democratic institutions' interventions. The company conducts a business with constant legal issues and heavily relies on judiciary independence to resolve any possible financial claim. The business and commercial decisions are significant for the company since they determine its continuity and the ability to engage in proprietary technology. The changing lifestyles across the globe impact Square's ability to engage its customers. The major economic forces impacting Square and the financial industry include price fluctuations, inequality index, and workforce productivity. Besides, the key factors impacting the financial service industry and Square Company include 5G infrastructure, E-commerce, and FinTech services. Lastly, the legal forces surrounding the financial sector and Square Inc. include consumer protection laws, data protection laws, and employment laws.
Introduction
The paper will be based on the financial service industry and Square Company. The financial service sector is one of the rapidly growing financial sectors due to the increased rate of digitalization. The financial service industry is composed of companies that offer financial services to people (Alt et al., 2018). The industry comprises financial firms, including insurance companies, banks, lenders, finance companies, and investment houses. Most conglomerates dominate the financial service industry due to their high profitability. Financial services are also critical since they shape fund transfers in different countries. Square Inc. is a company that plays a significant in the financial service industry. It is an American company responsible for digital payments and financial services. The company is located in San Francisco and was established by McKelvey Jim in 2009 (Square Inc., 2021). It was launched in 2010 and trades as a public company abbreviated as SQ. The company's name originated from its services that provide payment platforms to medium and small businesses. The company is also known for unique services such as Cash App, which assist in monetary transfer between businesses and users. Another type of service that the company provides is after-pay which allows for later payment. The identified services give the company a higher competitive advantage in the industry. The company has also invested in other areas, such as bitcoins. For instance, its assets worth $ 50 million are invested in bitcoin (Square Inc., 2021). Therefore, Square's financial investment and unique services place it in a better position in the financial industry.
NAICS classification code is a vital element for every business or company. It is a classification system that gives companies respective and unique codes, which prevents them from any alteration or legal issues. NAICS was developed purposely to assist in data collection and analysis of company benefits and financial position to understand the financial position of the industries. The NAICS classification code guides Square Company to work within the legal framework. The company's NAICS classification code is NAICS 1: 511210 and Company DUNS#: 96-366-5638. The NAICS 1:511210 shows that Square is also responsible for publishing software (Square Inc., 2021). Therefore, the NAICS classification code shows critical information about a company and its industry. I have decided to choose the financial service industry due to its impact on the global and national economies. Every activity in the country and global environment relies on finance. Therefore, it makes the industry a critical component that people cannot do without. I have also chosen the industry since it shapes all financial and non-financial engagement. The industry links to my future career, financial planning, and management. Therefore, it would give me an adequate understanding of the financial service industry. The paper analyses the financial service industry and Square Inc. based on political, economic, socio-cultural, technological, and legal forces.
Forces Impacting the Industry and Company and their risks
Political Forces
Political forces are the first aspects that heavily impact Square Inc. and the financial service industry. Political forces result from the government activities such as policies and instability, which may jeopardize the normal activities in the company and industry (Çitilci & Akbalık, 2020). Political instability is the major political factor that impacts the financial service industry. Political instability is when different political divisions or temperatures prevent the company from successfully engaging in normal business. Square Company operates in different countries with different political ideologies, thus heavily impacting its position. The financial service industry faces the same political pressure. Democracy and other democratic institutions are also classified as political factors impacting the industry. Çitilci and Akbalık (2020) note that there is a need for democratic institutions to strengthen financial service companies such as Square Inc. The industry and the company need a transparent political environment due to its critical business, which must be comprehensively considered regardless of the business location. The critical nature of the industry and the company also mandates them to embrace political unity and prevent any issues that would jeopardize customers' loyalty.
Additionally, government transition and policy changes are a political force impacting government transition and policies. The company is internationally based and faces constant government policy changes (Square Inc., 2021). The problem massively impacts the company's operations and its planning. The company must also consistently change its plans to meet the thresholds of such policy changes. A political terrorist attack is also a political force that impacts the financial service industry and Square. Most terrorists majorly target financial institutions to finance their operations. Also, their activities jeopardize peace and treaties destabilizing the company operations. For instance, terrorist hotspot countries such as Iraq and Iran limit the company from successfully expanding globally. Square has faced many terrorist attacks post 9/11 thus needs adequate insurance plans to promote its security. Lastly, a major political force impacting Square Inc. and the financial service industry is the independence of the judiciary. The company conducts a business with constant issues and heavily relies on judiciary independence to resolve any possible financial claim. The business and commercial decisions are significant for the company since they determine its continuity and the ability to engage in proprietary technology. The major risks linked to political forces include reduced company engagement, misunderstanding, reduced sales, and financial losses due to terrorist attacks. Therefore, Square Inc. and the financial service industry should focus on effective business strategies that adapt to the political forces due to the identified regulatory and political temperature.
Socio-cultural Forces
Socio-cultural forces are also a group of forces that determines the existence and operations of Square and the industry. These factors include values, lifestyles, and customs that impact the company's engagement with the employees and customers (Çitilci & Akbalık, 2020). The birth rate is the major socio-cultural factor. The birthrate is critical since it influences the emerging customers of the company. For instance, a higher birth rate in the United States indicates...