Financial services provide support for the making, investment and management of money. This includes everything from helping you save for a rainy day to trading stocks.
The financial services industry is a complex one that encompasses many different industries, including insurance and investment banking. It also includes digital technology that allows consumers to interact with their finances from anywhere in the world.
Banks, loan associations, credit card companies, and brokerage firms are all part of the financial services industry. However, not all of them offer the same products.
Some banks, for example, have purchased insurance companies and brokerage firms to expand their businesses beyond banking and lending. This strategy can make it easier for them to grow their customer base.
In this way, the financial services industry is much more comprehensive than it used to be. Before the 1970s, each sector of the financial services industry focused on a specific area of specialty.
For example, banking companies provided checking and savings accounts, loan associations offered mortgages and credit card companies mainly issued credit cards.
Another major category of financial services is asset management, which involves managing pensions, insurance assets, hedge funds and mutual funds. These types of businesses are often owned by large corporations.
Financial services are a crucial part of any economy, and if they fail to function properly, they can drag the country down. This is especially true during a recession, when capital dries up and economic growth can be sluggish.