Financial services is a broad sector that touches everyone, big and small. It includes banks, brokers and mortgage lenders but also insurance companies, securities traders, investors, financial advisors, Wall Street and more.
The Financial Services Industry is a major driver of the economy, providing the free flow of capital and liquidity. When it’s healthy, the economy grows and people can buy more goods and services.
Banks, for example, are financial services companies that accept deposits from savers and lend them to borrowers. They make a profit by earning the difference between what they pay depositors and what they receive from borrowers. In addition to lending money, banks manage savings accounts, investments and other assets for their customers.
Investment firms handle stocks, bonds, commodities and real estate. They may also invest in other businesses and manage private funds or insurance policies.
There are a number of regulatory agencies that oversee financial institutions, upholding their transparency and fairness to their clients. They vary by country, but are often designed to foster trust among consumers and providers.
The financial services industry has been in relatively good health since the global economic crisis ten years ago. But it will need to accelerate customer value creation if it wants to retain its customers and avoid conceding an increasing share of customer attention and wallet to other industries, primarily “big tech.”