The Financial Services Industry
When you think of financial services, you might think of banks, mortgage lenders and credit card companies. But there’s much more to the industry than that. Financial services include thousands of depository institutions, providers of investment products, insurance companies and other credit and financing organizations, as well as the critical financial utilities that support them all. They help individuals like you, as well as small businesses, large corporations and even the government get the financial goods they need to thrive.
The financial services sector plays a critical role in the global economy. When it functions effectively, the economic system can create jobs and growth. However, when the system breaks down, it can cause an economic recession. The financial system can become insolvent and stop lending money, which leads to lower spending and less revenue for businesses, which leads to fewer jobs and slower economic growth. This is why it’s so important to keep the financial services industry strong.
A financial good is any product that’s related to your finances, from a mortgage to a debt resolution service. A financial service is everything that supports those goods, such as the lenders who provide mortgages and the brokers who search for rates.
One of the biggest parts of the financial services industry is asset management. This is where pension assets, insurance assets and investments in securities are handled. Another part of this sector is private equity, where firms buy and run businesses. Increasingly, big tech companies are making inroads into financial services, too. Apple recently launched its own credit card, for instance, cutting into a $90 billion annual source of revenue for card issuers and networks.