The Financial Services Industry
The term Financial services encompasses a wide range of business areas that include deposit-taking, loans and investment management. It also includes the redistribution of risk through aggregation and insurance. Financial services are a vital part of any economy, contributing to its primary, secondary and tertiary sectors and facilitating the growth of the economy.
Banks are a core component of the financial services industry and their services include money transfer, cashing checks, issuance of credit cards and debit cards, and providing notary service. They also provide credit ratings and advise investors on risk exposure and investment strategies. They are also in the business of providing debt resolution services and credit card processing for businesses.
Investors also play a large role in the financial services sector, providing capital to help companies grow and expand. They can be private equity funds, venture capital providers or angel investors. These investors take a risk on the promise of future profits in exchange for ownership stakes or profit participation.
The financial services industry is heavily regulated, and independent agencies are designated to oversee different companies, uphold transparency, and ensure that their clients are treated fairly. Some of these agencies include the Financial Industry Regulatory Authority (FINRA) and the Office of the Comptroller of the Currency. Other important entities that are part of the industry include payment networks like Visa and Mastercard, financial market utilities that help stock, derivatives and commodity exchanges operate efficiently and international remittance services.