Financial services are the backbone of a nation’s economy, providing the means for people to save money and invest in businesses. They provide a free flow of capital and market liquidity, and help in risk management. When the sector is robust, the economy naturally expands and companies are better equipped to manage risks.
Choosing the right financial services for you will depend on your individual needs and financial goals. Consider factors like fees, reputation and security when making a decision. Regularly reassess your choices to make sure they align with your evolving needs and aspirations.
The financial services industry encompasses a broad range of activities, from banking and credit card services to lending and investment services. It is a very diverse field, with some segments of the industry having a long history while others are relatively new. Some of the more well-known segments include banks, credit unions and mortgage companies. Other segments include credit-card companies, insurance agencies and securities firms.
Investment banks provide financing for businesses and corporations in exchange for a share of the company’s ownership stake. Private equity funds and venture capital providers also fall into this category, providing money to start-ups in return for a profit participation or ownership stake.
Other important segments of the industry are brokerage services, supplying investors with a range of options for purchasing and selling shares and other securities. Banks and credit unions provide depository services, accepting savings deposits and offering checking accounts, savings accounts and other deposit products. Loan associations and mortgage companies offer personal loans and mortgages. Financial services also include asset management, wherein investment firms hold assets on behalf of clients, and prime brokerage, which is a bundled financial service for high-net-worth individuals.