Financial services are a range of economic activities that facilitate people’s use of money to invest or consume. These include savings accounts, loans, credit cards and insurance policies.
Banking – Handling deposits into checking and savings accounts; lending to customers, usually at a higher interest rate than the customer’s deposit. Banks also provide a wide range of investment products and earn revenue through fees and commissions.
Brokerage – Selling securities (equities, bonds, options, mutual funds) to investors on behalf of clients. They may also offer financial consulting or research.
Risk Management – Helping people manage their investments, including helping them choose which products to invest in. They can also perform due diligence on a company, give valuation services, and assist in real estate endeavors.
Insurance – Covering the cost of some large expenses that are often unexpected. They may offer health, life, auto, and home insurance plans.
Private banking – For individuals and families who are high net worth, they can have their accounts opened at a private bank or with a financial firm that provides these services.
Conglomerates – A financial services group that operates in more than one sector of the business, typically for diversification purposes. These groups may include life insurance companies, general insurance companies, asset management firms, and retail and wholesale banks.
Financial services are critical to the economy and play a vital role in ensuring that everyone can get what they need. Without them, people would have difficulty finding the funds to buy and sell goods and services, and people would not be as willing to save for a rainy day.