The financial services industry encompasses a wide range of service sector firms that provide individuals, businesses and governments with the tools they need to manage personal and business finances. This includes banks, credit unions, stock brokerage firms, mortgage lenders and loan companies, insurance agencies, securities traders, investment advisors, Wall Street and more. This industry is important because it allows people to spend money wisely, invest to reap future rewards, protect assets and liabilities and obtain the funds they need to grow their businesses or meet their personal goals.
Today, many sectors within the financial services industry have become more all-encompassing than before. Banks that once only provided checking and savings accounts now offer everything from mortgages to auto loans, while brokerage companies can now handle your entire portfolio of stocks, mutual funds and debt instruments. And even credit card companies like Visa and Mastercard provide a variety of payment services in addition to their core product of cards.
When it comes to financial activities, most people are familiar with the idea of insurance; a system that you pay into monthly or annually to help cover costs associated with major expenses and liabilities. But not everyone is aware that there are a variety of other kinds of financial services, such as remittances, factoring, hire purchase finance and credit unions. The presence of these institutions helps bolster economic dynamism as they enable people and businesses to invest more of their resources into productive activities, which in turn boosts demand, production and income.
