The financial services industry is a broad category of professional firms that provide a variety of products and services. These include banking, investing, and insurance. These products and services are important to everyday life. They allow individuals to borrow money for homes and cars, invest in assets that increase in value, and protect themselves against loss by purchasing insurance. They also employ millions of people around the world with good paying jobs that help them provide for their families and support their communities.
The definition of what constitutes a financial service varies by country, but it generally includes deposit-taking institutions; credit unions and mutual banks; building societies and mortgage banks; credit-card companies; insurers and pension funds; investment and securities firms; and any other firm engaged in financial intermediation. This category can also be expanded to include a broad range of business services, including cash management, leasing and hire purchase.
While many consumers understand that a bank provides a financial good by handing deposits into checking and savings accounts, the majority of people don’t realize that the company also offers other services like issuing credit cards and electronically transferring funds. Investment banks, for instance, are a type of bank that focuses on helping businesses raise money and can offer mergers and acquisitions, underwriting debt and equity, restructuring, and investment management.
Other services in the financial sector include brokerage, which involves buying and selling securities like stocks, bonds, options, and commodities on behalf of clients. They can also provide research and maintain a public stance on specific securities and industries.