The financial services sector is a key component of healthy economies around the world. It provides a range of products and services that help people and businesses manage their money, save for the future and invest in stocks and bonds.
It encompasses a variety of different industries, including banks, brokers, mortgage lenders and insurance companies. It also includes Wall Street and other investment firms.
Regulatory agencies are critical to financial services, ensuring that they remain transparent and uphold fair practices. Two key regulators include the Financial Industry Regulatory Authority (FINRA) and the Office of the Comptroller of the Currency.
Banking is a fundamental aspect of the financial services industry. It is the foundation of all other types of financial services and includes a variety of tasks such as accepting deposits, making loans and distributing risk.
Banks and other financial institutions earn revenue by charging depositors interest on their funds and paying borrowers interest. They also charge fees or commissions on their services.
Investment and insurance firms make a profit by channeling cash from savers to borrowers and redistributing risk. They also make a profit on their investments by acquiring assets such as stocks and bonds and managing them on behalf of clients.
Consumer finance is another important type of financial services. It includes everything from credit cards to mortgages and personal loans.
This is a growing area of the industry and continues to grow as technology makes it easier to access financial products and services from the comfort of your home. It also challenges traditional methods of customer service, requiring a balance between digital and physical channels.