Financial services are the industry that facilitates money movement to, from and within people’s personal finances. This can be through investments, banking, credit cards, payments systems, and insurance. Financial services companies include investment banks, asset managers, brokerages, banks, lenders, insurance firms, credit-card issuers, payment processing companies and more.
The most well-known company in this sector is a bank, but even that didn’t used to be the case. Historically, each segment of this industry stayed within its own niche. For example, banks offered checking accounts and loans, while brokers specialized in stocks and bonds. But today, more and more companies from completely different sectors are beginning to offer some form of financial services.
This is mostly because of the growing importance of this industry. A strong financial services industry is crucial to the health of a country’s economy, as it helps consumers make better decisions with their money, which in turn allows businesses of all sizes to grow and thrive.
Financial services also help people save and invest, which in turn helps to improve their lives. Rather than having to store their cash under the floorboards or in their mattress, families can use their savings to purchase land and build houses, start and expand businesses, buy livestock and consumer durables, etc. Many families in the developing world would not be able to afford these goods without access to financial services. These institutions provide the means for poor families to secure their futures, build a dignified life and create jobs for others in their communities.