When companies provide a financial service, they have an opportunity to improve people’s lives. Financial services include everything from credit card processing to facilitating investments and lending money. However, there are important distinctions to understand. Financial services must be rooted in value and be easy for customers to use, but they should also be a catalyst for economic growth.
The Financial services industry is a huge sector that encompasses many different types of professionals and companies. The term can be misleading, as it can imply that all companies that deal with money fall under this umbrella, but this is not the case. The financial services industry actually includes banks, credit unions, investment firms and other large and small businesses.
These businesses are all responsible for creating and managing a variety of financial products and services. They may be responsible for advising on mergers and acquisitions, or they might specialize in underwriting debt and equity for private and public companies looking to raise capital. They can also offer financial planning services, escrow and mortgages, investment management services, asset allocation services, securities research, prime brokerage and other bundled broker services.
Financial services are essential for a strong economy because they give consumers the confidence to make big purchases, and they also provide an avenue for small businesses to access funding. Without a healthy and robust financial services sector, our economies would be much more stagnant. In fact, a major downturn in this industry can lead to recessions and depressions.