Financial services are the industry that provides people with access to credit, investment opportunities, and insurance. Financial services also provide a number of other benefits that make life easier for people. These include safety and security, convenience, access to money and assets, and opportunities for wealth creation.
The global financial services market is comprised of the following sectors:
Banking
Banking services encompass a wide range of activities, including direct saving and lending by banks to customers, but also the redistribution of risk through insurance, and investments. The most traditional financial service that a bank provides is a checking account, but many now offer savings accounts, mortgages, loans, and credit cards. Banks generate revenue by charging fees and through interest rates charged on loans and deposits.
Regulatory bodies
Regulatory agencies are independent organizations that oversee different industries to ensure that they are operating transparently and fairly. They also help to promote innovation and ensure that the financial services sector remains competitive. The world’s most important regulating body is the Federal Reserve System in the United States.
Private equity funds and angel investors provide financing for companies in exchange for ownership stakes or profits. They are an important source of growth capital for small and medium sized businesses.
Insurance is one of the most important financial services, and includes protection against death or injury (life and disability income insurance, health insurance) and against property loss or damage (property and car insurance). The financial services industry also includes actuarial and underwriting services and brokerage and agency services.