The Financial services industry is the sector that touches everyone’s finances in one way or another. It includes everything from bankers and hedge fund managers to small community banks and nonprofits.
The industry varies from country to country, but it is often divided into sectors that offer various services. The most common sector is the banking industry, which involves handing deposits into checking and savings accounts as well as lending money to customers. Some of the money deposited in these accounts must be kept on hand in case a customer does not use it, but most is available for loans.
Insurance, brokerage, and credit card companies are other branches of the financial services industry that offer consumers a variety of products and services. Insurance companies protect people against loss of income, and brokerage companies help their clients find investment opportunities in stocks, bonds, and mutual funds.
Other industries in the financial services industry include asset management, real estate, and business consulting. These are areas where a degree in finance isn’t always necessary to start a career, but it can be helpful for higher positions within the industry.
Consumer financial services – This sector offers products and services that help people afford goods and services by paying them in installments over time. These services include debt resolution, loan consolidation, and credit card services.
Commercial banking – This sector of the financial services industry is made up of large commercial banks, community banks, credit unions, and other entities that provide checking and savings accounts, mortgages, auto loans, and other financial products. These institutions earn revenue by charging fees, commissions, and other methods of generating income.
Securities research – This sector of the financial services industry focuses on providing information on the market for specific securities and industries. It can also involve trading these securities on behalf of its clients, or as a service to other financial institutions.
Broker Services – This sector of the financial services industry provides bundled brokerage and advisory services for a wide range of financial products, including commodities, bonds, and stocks. It can also involve services like credit counseling and tax preparation.
Private banking – This sector of the financial services market offers specialized banking services to high net worth individuals and families. These firms offer a number of features to meet their individual needs, including checking and savings accounts, mortgages, personal loans, and retirement and investment planning.
Conglomerates – This sector of the financial services industry encompasses large corporations that have multiple divisions. These types of businesses have the benefit of bringing together several financial services sectors into one company, making them more competitive and profitable.
They also tend to be less capital intensive than their smaller counterparts, so they can reinvest their earnings in other departments of the company.
The financial services industry is important to a country’s economy, and the strength of the sector can determine economic growth. When the financial services industry is strong, consumers generally have more confidence in the economy and are more likely to spend their money on goods and services. Similarly, when the sector is weaker, consumers can’t purchase as many goods and services and the economy suffers.