When people think of financial services, they often picture banks, brokers and mortgage lenders. However, there is much more to this industry than meets the eye. This massive field includes insurance companies, securities traders and investors, Wall Street, and more. It also serves small and large businesses, nonprofits and even individuals with their financial needs.
A vibrant capital market is one of the best indicators of a healthy economy. When there is a lot of activity in this sector, it means that people are investing their money into various enterprises to help them grow and reap more profits in the future. Financial services facilitate this process by providing companies with the necessary funds to increase their productivity and generate more profits.
Consumer finance is another key segment of the financial services industry. This is made up of credit card services, personal and student loan services, and mortgage lending. These services give consumers the power to purchase products and services on their own terms by spreading payments over a set amount of time.
Many different companies within the financial services industry are merging and expanding to offer more products. For example, a bank may acquire an investment company or an insurance firm to expand their offerings. Alternatively, some companies are setting up separate divisions that focus on different products. This allows them to offer a more diversified portfolio to their customers and earn more revenue from each type of product.
Regulatory bodies are an integral part of the financial services industry. They are designed to oversee different financial institutions’ operations, uphold transparency, and ensure that clients are treated fairly. Two key regulators include FINRA and the Office of the Comptroller of the Currency.