Financial services are the business activities related to banking, insurance, and investments. They consist of deposit-taking, loan and credit intermediation, securities intermediation, asset management, and other market intermediary services. This sector is regulated by independent agencies to maintain transparency and ensure clients are treated fairly.
Whether you are looking to secure a mortgage, purchase a car, or invest in a startup, chances are you have used financial services. From commercial banks and investment firms to insurance agencies and credit unions, the financial industry touches everyone in some way. Despite its massive size, it can be challenging for the industry to keep up with customer demand and changing technologies, especially as new players enter the space.
In the past, federal regulations prevented banks from offering a wide range of financial services to their customers. So, consumers turned to other companies like stock market brokers and mutual fund companies for the variety of services they could offer. This lead to the formation of financial conglomerates, where businesses combine their offerings to provide a broader range of products and services.
Financial services also include venture capital and angel investor services, which provide investments to small and medium-sized businesses in exchange for ownership stakes or profit participation. These investments can help entrepreneurs overcome barriers to growth and enable them to compete with larger established companies. Additionally, financial services can provide credit to individuals and businesses that may have difficulty getting approved for loans from traditional lenders.