Financial services is the term used to describe the wide range of services offered by the finance industry. It encompasses a diverse group of companies that offer products and services including insurance, money management, payment systems and digital banking technology.
The main types of companies involved in the financial services industry include banks, credit unions, mutual funds and brokerage firms. Each type of company serves a distinct segment of the market and earns revenue through fees, commissions and the spread on interest rates between loans and deposits.
Banks and other financial service providers like credit unions offer a variety of products for customers to choose from, which can include checking and savings accounts, home mortgages and auto loans. These organizations also provide services for consumers to handle their personal finances, such as loan repayment and tax preparation.
Besides providing the means of saving and investing, financial services also facilitate promotion of trade in the domestic as well as foreign markets. They also help the regions that are backward economically to catch up with developed countries by offering cheaper credit and enabling investment through which the producers can expand their businesses further.
These services are often regulated by independent agencies, which oversee the operations of financial institutions and ensure transparency. Regulatory requirements can impact a financial services business’s ability to grow and innovate, so it’s important to check with your firm to see what types of regulations it needs to comply with.