Twelve financial institutions (nine banks and three insurance companies) from five countries (France, West Germany, Japan, Sweden, and the United States) were studied to determine the directions in which financial service markets and firms are moving as a result of increasing competition and technological change. Data were collected from open-ended interviews with representatives of the firms studied as well as financial services experts from the business community, trade unions, government, and academia. It was found that financial service markets, which were once characterized by great stability and continuity, are changing rapidly in all of the countries examined. These changes are promoting a radical shift in the functional emphasis of firms away from the production of services (back-office functions) toward customer assistance, sales, and product development (front-office functions). This shift of functions is demanding a fundamental reorganization in the division of labor and a new emphasis on decentralization of functions and decision-making responsibilities that are in turn producing fundamental changes in the firms' human resources and training needs. (MN)