What Are Financial Services?

Financial services

Financial services are economic services that encompass a broad range of service sector firms that provide financial management, including credit unions, banks, fintechs and pensions providers. They help people with saving, investing and borrowing and protect against financial risks through insurance. A healthy finance sector boosts economic growth, which in turn benefits individuals and businesses.

The financial services industry seems all-encompassing today, but it wasn’t always that way. Until the 1970s, most sectors of the industry focused on a specific area. Banks offered checking and savings accounts, loan associations provided mortgages and personal loans, brokerage companies helped consumers invest in stocks and mutual funds, and credit card companies like Visa and MasterCard specialized in providing credit cards.

But with time, banks began offering more and more services in-house and merging with other companies. This made it more convenient for customers to get all of their financial needs met at one location. It also made it easier for companies to generate revenue from a variety of different sources.

For example, stockbrokers buy and sell commodities like coffee and oil to make a profit. They also keep up with the latest market trends to give their clients advice on how to diversify their portfolio.

Financial services also include debt resolution services, which negotiate with creditors to allow consumers to pay less than they owe. This reduces their debt and helps them reestablish good credit. It also includes payment services, which facilitate credit and debit card transactions for a fee.

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