Financial services is an industry that encompasses a broad range of businesses that provide products and services related to money management. It includes everything from debt resolution to global payment providers like Visa and Mastercard. It also includes credit card machines and networks, as well as accounting, currency exchange and wire transfer services.
Often referred to as the banking sector, this part of the financial services industry handles deposit accounts and loans. Banks work with individuals and businesses to receive and pay for goods and services, including lending them money for mortgages, car purchases or even paying back friends for lunch. This is one of the most heavily regulated sectors of the financial services industry.
Another part of the financial services industry consists of insurance companies. These companies offer protection against death or injury (like life insurance and health insurance), against property loss or damage (homeowners and auto insurance), or against liability and lawsuits (liability and homeowner’s insurance). Financial services also include investment management, which involves the selection of investments and asset allocation based on client goals and risk tolerance.
The final part of the financial services industry consists of regulatory agencies, which are independent entities that oversee different aspects of the financial sector and ensure transparency and fairness for clients. Examples include the Federal Reserve and the SEC. Regulatory agencies also monitor and enforce laws regarding securities, taxes and other important aspects of the financial services industry.