Financial services is a massive industry that encompasses everything from banks, brokers and mortgage lenders to stock traders, Wall Street and insurance companies. It includes everything that touches money, and it doesn’t just apply to individuals; small businesses, large corporations, nonprofits and the government all rely on financial services to operate effectively.
One of the most important sub-sectors in financial services is insurance. This type of service offers protection against risk, whether it’s against the death or injury of a person (life and health insurance), against damage to property (car or homeowners insurance) or against lawsuits and liabilities (business liability or professional negligence).
The other main sub-sectors in financial services are investment management and credit services. Investment management provides investors with a variety of ways to earn money from the assets they own, while credit services provide consumers with an easy way to borrow funds. This allows people to make bigger purchases and also build up their savings.
Regulatory bodies are another key component of the financial services industry. These independent agencies are designated to oversee the operations of different financial institutions and ensure that they operate fairly and are held accountable for their actions. Some examples of regulatory bodies include the Financial Industry Regulatory Authority and the Office of the Comptroller of the Currency.
Finally, another crucial part of the financial services industry is entrepreneurship. Startups and small business owners rely on financial services to fund their ventures, which in turn creates jobs and adds to the economy. This is particularly true for tech startups, which often receive venture capital from financial services providers in exchange for a stake in the company or a cut of the profits.