Financial services are the businesses and activities that help people, companies and governments manage their money. They include deposit-taking; lending of all types (including credit and debit cards); investment banking; securities brokerage, agency and advising services; insurance underwriting, risk assessment and claim settlement services; and all other financial intermediation.
The industry is incredibly large and varied. It includes everything from payment systems to credit card issuers, from legacy banks to emerging challengers. Moreover, the sector encompasses every type of business that touches money in some way—whether it’s insurers, wealth managers or robo advisors. The scope of the industry means that there is plenty of opportunity for startups to make their mark.
Ultimately, the success of the sector depends on how well consumers understand it and what products they need. Many consumers are confused about the intricacies of their debt and basic money management, while others simply don’t know how to save for the future. The ability for fintechs to offer innovative tools that make it easier to spend, save and invest could be a key driver of growth for the industry.
Financial services are an important part of the economy, supporting millions of jobs and enabling individuals to meet their spending needs. They enable consumers to get loans for homes, cars and education; save for retirement or other goals; protect their property and health through insurance; and allow businesses to grow and expand. When this sector is healthy, it boosts consumer confidence and purchasing power, and when it falters, it can lead to economic recessions.