The Financial Services Industry
Financial services help people make, invest and manage their money. They are involved in everything from trading shares on Wall Street to helping you save up for a rainy day.
Banks, brokers and mortgage lenders are all part of the financial services industry but they are not the only ones providing these services. There are many other sectors within the industry, including insurance companies, securities traders, investors, Wall Street and more.
Banking and lending are both services that earn revenue through fees and commissions, as well as the spread on interest rates between loans and deposits. These services are provided by large commercial banks, community banks, credit unions and other entities.
Investment and asset management are also services that generate revenue. These firms work with high net worth individuals and institutions to develop intricate (typically derivative) products to meet specific investment goals.
Insurance and risk management are also services that earn revenue. These firms provide personal and commercial lines of insurance, including life, health, auto and home coverage.
Reinsurance is another area of the financial services industry that involves insurance sold to insurers themselves, to protect them from catastrophic losses.
The financial services sector is a major driver of national economies and plays an important role in fostering trust among consumers and providers. This is why governments often regulate and oversee the provision of financial services, to ensure that they are properly regulated and to ensure consumer protection.