Financial services involve all the activities that help people and organisations to make, invest or manage money. This can include things like trading shares in the stock market, helping people save for a rainy day or even providing insurance to protect against a house fire.
Banks, brokers and mortgage lenders are all part of the financial services industry. It also includes insurance companies, securities traders, investors, Wall Street and other professional firms.
Banking (financial management) – Handles deposits from customers and lends them to individuals or businesses for loans at a set interest rate. A bank must maintain a minimum of 10% on deposit to cover FDIC insurance requirements, but the rest is available for lending.
Brokerage and investment services – Offer consumers investments in stocks, bonds or mutual funds. This may include investing in real estate or advising clients on investment strategies and risk management.
Credit cards and prepaid debit cards – Provide credit facilities to customers to help them pay for goods and services. This can include a credit card, prepaid debit card, e-wallet or other digital payment system.
Insurance – The insurance sector includes the insurers who sell insurance policies, the underwriters who write the policy and the brokers who search for rates or negotiate them. This is a complex area that requires specialist knowledge and experience.
With the growth of technology, the financial services industry has shifted from traditional brick-and-mortar operations to online platforms and mobile apps. As consumer preferences for remote access to their finances shift, banks and neobanks are developing new digital services that appeal to this trend.