Financial services is a large industry sector that encompasses a broad range of businesses involved with managing money and investments. The field includes credit card and payment companies like American Express, mortgage lenders and personal and student loan providers. It also includes investment banking firms, insurance companies and asset management businesses. Financial services companies are a vital component of both the national and global economies and provide important jobs to millions of people around the world.
When most people think of financial services, they immediately picture banks and loan associations offering checking and savings accounts, credit cards and mortgages. However, it wasn’t always that way. Before the 1970s, each sector in this business stayed within its own specialty. Banks offered checking and savings accounts while credit unions provided loans. Insurance companies specialized in insurance, while brokerage companies sold stocks and mutual funds.
Today, the lines between these sectors have become blurred. As a result, many businesses that once remained independent are now part of larger financial services conglomerates. For example, a bank might purchase an insurance company and add it to its existing portfolio. In this way, the bank is able to offer a wider variety of products and services while increasing its revenue.
This diversity of options is beneficial for both individuals and the economy. When people have control over their own finances, they’re more resilient in the face of unexpected challenges and can save for a better future. A healthy financial services sector allows millions of people to buy homes, vehicles and college tuition while protecting their health, well-being and property with affordable insurance policies.