Financial services are economic services that encompass a broad range of business sector firms that provide financial management. They include credit institutions, insurance companies, banking, building societies and mortgage banks, credit cooperatives, factoring, hire purchase finance, mutual funds and other investments, cash management firms and credit intermediation.
The growth of tertiary sector is vital to any economy and the service industry helps to provide jobs, improve living standards and reduce unemployment. The tertiary sector grows due to the availability of more consumer goods and services. Financial services enable consumers to obtain more products and services by helping them with loans and mortgages, as well as enabling them to purchase assets like cars and houses with the help of hire purchase and leasing companies.
Insurance companies offer policies that protect against the unforeseen. The types of insurance that exist include life, health, car and home insurance. The financial services sector also includes investment banking, which involves underwriting debt and equity for companies looking to merge or acquire others. Another branch of this sector is asset management, which oversees pensions, insurance assets and hedge funds.
Other branches of the financial services industry include currency exchange and wire transfer services, as well as credit card networks and companies that offer debt resolution services. It also includes financial market utilities, such as stock and commodity exchanges, clearinghouses, and derivative and monetary exchanges. There is also a separate category of financial services known as private banking, which provides services to high net worth individuals.