Financial services are those companies and agencies that provide the money that people need to buy other products and services. This includes banks, credit unions, insurance firms, and the providers of critical financial utilities.
Banks are a key part of the industry, collecting funds from those who have it and then loaning it out to those who need it. They offer deposit services like checking and savings accounts, and they also sell investment products like mutual funds.
Other important players include consumer finance companies, which help people afford products and services by spreading the cost over time with loans like credit cards and mortgages. This sector is also home to payment services companies such as Amex, which provides charge and credit cards with a wide range of rewards programs.
The financial services industry has seen a lot of changes since the 1990s with deregulation and globalization playing an important role in its evolution. This helped lead to the creation of multi-service financial conglomerates that offer banking, investing, and insurance services all under one umbrella.
In addition to the changes in global markets and deregulation, other important events that have impacted the financial services industry include the stock market crash of 2000 and the subprime mortgage crisis that followed. These events highlighted weaknesses in the industry such as poor lending practices and the need for more oversight from government agencies. Despite the challenges, the future looks bright for the financial services sector.