Financial services are an umbrella term that encompasses all of the businesses that touch your money. They include credit card companies, insurance providers and even small community banks.
Banks and Investment Banking
The primary function of banks is to deposit your money into checking and savings accounts, as well as lend you money for other purposes. A few of the services provided by banks include cashing checks, issuing credit cards and transferring money electronically.
Investment Services
Unlike banks, investment banks focus on raising and managing capital for their clients. These companies offer a variety of services, including mergers and acquisitions, restructuring and debt and equity underwriting.
Insurance
As a financial good, insurance policies help to protect people from things like fire and other disasters. But they also provide other financial services, such as advising and negotiating rates for their clients. The brokers who shop for and negotiate insurance rates, as well as the underwriters who create those policies, are also part of this industry.
Business Finance
The main function of business finance is to ensure that consumers can afford to purchase products and services they need in order to improve their standard of living. From investing in real estate to paying for college, this type of financial service helps people make large purchases.
Consumer Finance
The consumer finance sector includes credit card firms, mortgage lenders and personal and student loan services. This sector enables individuals to make large purchases by making payments in installments over a period of time.
A large portion of this sector is based on lifecycle models, which means that financial services companies need to be able to understand their customers’ needs at different stages in their lives. This allows them to offer products and services that will be most useful at those points in their lives, whether they’re starting out or getting married.
Digital Gig Work
There is also a growing need for financial services companies to be able to digitally manage their own customer relationships and their own financial data. As financial activity becomes increasingly digitized, both big and small tech firms are looking for partners who can assist them in creating new and more efficient ways to interact with their customers.
Government and Public Finance
Aside from assisting private businesses, the financial services industry also plays an important role in the government. They help in the raise of both short and long-term funds for the government to meet its revenue and capital expenditure requirements.
They also help in the promotion of domestic as well as foreign trade through factoring and forfaiting companies. This increases the sale of goods in the domestic market and exports of goods in the foreign market.
These services are a great boon to backward regions of the country that are still underdeveloped economically and need more assistance. They enable these regions to catch up with the rest of the nation in terms of production, employment, income and demand.
Women are faring better in the financial services industry than they have been historically, with more women making it to the highest levels of corporate leadership. But progress is far from sufficient for equal representation at every step of the pipeline.
