GlobalEDGE – The Financial Services Industry

The financial services industry consists of companies that provide a wide range of services to businesses, individuals and investors. These companies include banks, credit-card issuers, insurance firms and investment funds. The industry is regulated by government agencies.

The economy depends on financial services to function properly. They help people save for retirement or other goals, invest in stocks and other assets, obtain credit, and safeguard their property and health with insurance policies. A healthy financial services sector also helps small businesses grow and create jobs. Without access to financial services, millions of people would not be able to afford basic goods and services like checking accounts, credit cards, mortgages, or insurance coverage.

GlobalEDGE defines financial services as all the activities associated with providing funds to facilitate exchanges and transactions in the marketplace. It includes those who accept deposits and repayable funds, make loans, and operate payment systems such as clearing houses and financial market utilities. It includes the providers of investment products, such as mutual funds, factoring, and credit-card finance. It also includes those who work to underwrite and advise on mergers and acquisitions.

The financial services industry has evolved from its roots in banking, insurance and securities trading to a massive industry that includes many different sectors. Until recently, each sector of the industry tended to specialize. Banks offered checking and savings accounts, loan associations gave out mortgages and personal loans, and brokerage companies and credit card firms specialized in their respective markets. However, the Gramm-Leach-Bliley Act of the 1990s made it legal for banks to offer a variety of investment and commercial banking services and to merge with each other, creating multi-service financial conglomerates.

Posted in: Gambling