Financial services are the making, investing and management of money for people and businesses. Banks are the most well-known examples, but the industry encompasses much more than just checking and savings accounts. It includes mortgage lenders, brokerage firms and credit-card companies. It even includes insurance companies and the specialized trading of securities like shares, mutual funds and derivatives.
Financial institutions serve as intermediaries for the government and develop the economy of a country by promoting investment, production and saving. For example, if an industry is having problems, the government may step in with selective credit lines at lower interest rates to help it get through a rough patch.
Other financial services include advising on corporate restructuring and mergers, private equity, venture capital and asset management. Professionals in this field help clients invest their money wisely, often providing them with a tailored mix of assets according to their individual needs and risk tolerance.
The financial services industry also consists of credit-card companies, debt resolution agencies and global payment networks such as Visa and Mastercard. Some firms specialize in one particular area, while others act as conglomerates that offer a wide range of products. Increasingly, the line between different sectors of this industry is blurring as companies branch out into areas they didn’t originally focus on. For instance, banks are now offering investments like money markets and mutual funds in addition to their traditional checking and savings accounts. This makes them more competitive with other sectors like brokers and credit-card companies.