Financial services are an integral part of a nation’s economy. They provide individuals with loans for mortgages, car purchases, education, and more; allow businesses to grow and expand; and help people save money for retirement or emergencies through investments and insurance policies. Financial services also play a vital role in helping a country’s citizens and businesses manage risk.
The industry is incredibly vast and encompasses a variety of different professional firms. Some, like banks, offer deposit accounts and loans while others specialize in trading securities and credit cards. The financial services industry is regulated by government agencies to ensure consumer protection and foster trust between providers and customers.
While it may seem like the industry is all-encompassing now, it wasn’t always this way. Before 1970, each sector of the financial services industry more or less stuck to its own specialty. For example, banks offered checking and savings accounts while loan associations provided mortgages and auto loans. Brokerage companies gave consumers access to investment opportunities by selling shares of stock in businesses and mutual funds, while credit card providers like Visa and MasterCard provided credit cards.
Ultimately, the financial services industry is all about bringing money to where it’s needed most. Without a healthy financial services industry, consumers would have difficulty getting the funds they need to meet their needs. The industry is important to the global economy and provides millions of jobs around the world. It also helps individuals save for retirement or emergency expenses, safeguards property and health through insurance policies, and enables businesses to grow.