Financial services is an industry that makes, invests and manages money for individuals and organizations. It is an umbrella term that encompasses a wide range of businesses, from banks and payment systems to investment firms and insurance companies.
Banks are a major subsector of financial services, and they offer a range of services that include checking accounts, savings accounts, mortgages and credit cards. They earn revenue primarily through the spread between the interest rates they charge to depositors and the interest rate they charge borrowers for loans.
Consumer finance is another key area of the industry, which includes lending to people who want to buy a house or car, and investing in real estate. It also involves helping people pay for their education, as well as providing credit cards and personal loan services.
Insurance is another sector of the industry, which provides coverage for assets like cars and homes to protect them from death or injury. It is an important component of the sector, because it helps people manage their financial risks.
The financial services sector is an important part of the economy because it ensures that everyone has access to capital. If the system is weak, consumers may struggle to purchase goods or services and a nation’s economy can suffer.
The financial services sector is experiencing a lot of change due to the growth of the internet and advances in technology. This is good news for the industry because it means more opportunities for new products and a wider variety of customers.