Financial services encompass all of the ways that money is managed and exchanged. It includes everything from banking, investing, and insurance to credit card companies and global payment service providers like Visa and Mastercard. It is a massive industry that is often divided into many smaller segments. The four key roles in financial services are depository institutions (those that offer checking and savings accounts), credit-card companies, investment firms, and mortgage lending.
A healthy financial services sector is essential for any economy. It allows individuals to obtain loans for housing, cars, or education and safeguards their health and property through insurance policies. It also helps businesses expand by providing capital in the form of loans and investments.
The financial services industry is made up of depository institutions, such as banks and building societies; credit unions; mortgage banks and associations; and other entities that provide deposit-taking, clearing and settlement services. The sector also includes private equity funds and venture capitalists that provide investment capital to new or growing businesses in exchange for ownership stakes or profits; broker-dealers and mutual fund companies that offer consumers opportunities to invest in stocks, bonds and other securities; and insurance and pension providers.
It is not uncommon for a single company to operate in several different sectors of the financial services industry. These financial conglomerates typically enjoy a lower cost of operation since they can leverage their scale and operating expertise across multiple product lines. These types of companies are also often able to attract talented professionals who would otherwise have difficulty finding jobs in their specialties.