The Financial Services Industry
When you think of the financial services industry, you probably picture banks, brokers and mortgage lenders. While those sectors are an important part of the industry, there is much more to it than that. Financial services encompass a broad range of professionals and products that help individuals, small businesses, large companies, nonprofits and even the government with their money management needs.
Financial activities are the transactions that support a country’s economic goals, from investing to borrowing to lending to savings and spending. The growth of a country’s economy depends on the health of its financial services industry. When that industry falters, it can affect the rest of the economy and create a recession.
The different segments of the financial services industry are asset management (pensions, insurance assets, and hedge funds), banking services, securities trading and brokerage, debt resolution, and monetary management services. However, the lines between these categories are becoming increasingly blurred. For instance, in the 1990s, deregulation led to a number of financial conglomerates that offer multiple financial products such as money market and mutual funds, as well as investment offerings and mortgages.
This industry sector also includes professional firms such as credit rating agencies, accounting services, and law firms that provide legal advice to clients regarding investments and loans. In addition, the industry is heavily dependent on technology. For example, it is not uncommon for clients to check their bank accounts online at any time, or for securities traders to trade in real-time using a system that connects them with other brokers around the world.