Types of Financial Services
Financial services is a term that encompasses the finance industry, from banks and mortgage lenders to insurance companies. The industry is a crucial part of any economy because it helps channel money from savers to borrowers and redistributes risk.
It also offers services that people don’t usually do themselves, such as asset management. There are many different types of financial services, and they are often handled by conglomerates or large entities that have multiple businesses in different areas.
Banks and brokers provide services to individuals, while mortgage lenders and insurance providers serve small business owners, nonprofits and even government agencies. Several independent regulatory bodies, such as the Financial Industry Regulatory Authority and the Office of the Comptroller of the Currency, oversee the financial services industry to ensure that consumers are protected.
Consumer finance is a service that provides credit to help people pay for goods and services in installments. Examples include credit cards, student loans and mortgages.
Investment services are a subset of financial services that offer financial management and wealth planning to individuals. These firms are often referred to as family offices, and they tend to service a single wealthy individual or group of individuals with financial plans tailored to their needs.
Private banking is a service that is provided to high-net-worth individuals by banks and other firms. These services can be used to pay bills, transfer funds, deposit or withdraw cash and manage investments.
Financial services are a growing sector of the world’s economy. Despite its importance, the financial sector is increasingly facing new challenges as technology changes the way people interact with their finances. This is especially true for financial institutions, which must rethink how they can build their customers’ financial wellbeing.