Financial services is an industry that includes all roles dealing with managing and exchanging money. This includes banking, investing and insurance. It also incorporates debt-collection services. Financial services are important for the economy because they help with saving and investment, which leads to economic growth.
One of the most familiar types of financial services is insurance. This service is a way to protect yourself against the loss of an asset (such as a car or house) or a liability (like a lawsuit). This sector includes many different companies, such as credit unions, banks, credit-card companies, mortgage lenders and insurance agencies.
Another category of financial services is consumer finance, which helps people afford products and services by letting them pay for them in installments. This industry includes a wide variety of firms, such as credit-card companies, mortgage lenders and personal and student loan services. It also includes a number of large payment firms, such as American Express and PayPal.
Professional financial advising is another area of the financial services industry. This segment offers a range of services to individuals and businesses, including investment due diligence, M&A counseling, valuation, real estate consulting, risk management and tax advisory. Many large global consulting firms and smaller domestic firms provide these services.
Finally, the capital market sector of the financial services industry provides financing through a variety of sources, including private equity funds and venture capital providers. This helps businesses expand and allows them to reap more profits. The presence of these financial services increases the activity in the capital market, which is a good barometer of the economy.