Financial services are the economic services provided by the finance industry, which encompasses a wide range of businesses that manage money, including banks, credit unions, credit-card companies, insurance providers and investment firms. Financial services help consumers and business put their money to productive use, whether it is by investing in the next big technology or by borrowing funds to buy a house. The financial services industry is regulated to ensure fair treatment of borrowers and lenders and protect investors.
The financial services sector is massive, comprising everything from payment processing and global payments to debt resolution. The sector includes a huge variety of players, from legacy banks to fintech challengers. And as more financial activity becomes digitized and remote, the sector is evolving to meet the needs of consumers and business alike.
One of the most important changes is the consolidation of the banking industry, as large and small banks have merged to create bigger economies of scale. This has led to layoffs, but it has also created opportunities for smaller banks to grow and acquire bigger competitors. The emergence of robo-advisers is another trend, as these online services offer low-cost investment options that were previously only available to the very rich.
As the world’s economy becomes increasingly interconnected, it’s critical that the global financial services industry evolve to keep pace with changing consumer demands. This is why many of the largest financial services companies are focusing on innovation and digitalization. They are also bolstering their risk management and data analytics capabilities. In the future, these investments will pay off as financial services companies adapt to a new era of risk and opportunity.
When we think of financial services, we often think of the things that a bank does for its customers. Banks provide deposit accounts, loans and credit cards. However, this industry is much broader than that, and there are countless sub-sectors within it.
One major category of financial services is insurance, which covers a wide variety of products. These include protection against death or injury (life and disability insurance), against property loss or damage (home and car insurance) and against liability or lawsuits (liability insurance).
Other important categories of financial services include global payments and settlement, currency exchange and wire transfer services. This industry is also home to a number of credit-card networks and service providers, such as Visa and MasterCard. Lastly, the financial services industry includes asset management and pension fund management. These services are designed to optimize the return on an investor’s assets, thereby maximizing his or her net worth. This is done by managing risks, reducing costs and generating income. These services are a vital part of the economy. Without them, the world would be a very different place.