The Financial Services Industry
Financial services is a broad industry that includes banks, mortgage lenders and brokers. These entities provide everything from checking and savings accounts to loans and even investment opportunities for consumers.
Banks act as middlemen, collecting deposits from depositors and pooling them to be lent to borrowers who need them. Brokers sell consumers investment products such as stocks, bonds and mutual funds.
Insurance is part service and part product, providing protection against certain risks such as a house burning down. These companies hire brokers and underwriters to search for the best rates and then create policies that protect their customers.
Loan associations, on the other hand, provide mortgages and personal loans. They also work with small community banks and nonprofits to provide the money necessary for people to start or expand businesses and other enterprises.
The industry is regulated by independent agencies, whose jobs are to ensure transparency and fair treatment of their clients. Some of the major organizations include FINRA and the OCC.
A wide range of other businesses and agencies are involved in the financial services sector, including accountants and tax filing services, currency exchange and wire transfer services, credit card machine services and networks, debt resolution services, and global payment providers such as Visa and Mastercard.
As with any sector, the Financial Services industry is impacted by a variety of factors and risks. Large-scale power outages, natural disasters and an increase in cyberattacks are a few examples. When these events occur, it is crucial for companies within the sector to be able to respond quickly and efficiently in order to minimize the effects of the incident on their operations.