Financial services are a broad category of industries that include all the various companies that make, invest and manage money for people and organizations. This includes banks, brokerages, credit card issuers, insurance companies and more.
Banks are places where you keep your money, but they don’t just sit there – they use it to lend it out to people who need it. A loan from a bank can be used to buy a car or pay for your child’s education, and you will then have to repay the lender plus interest.
Brokers are companies that find you the best rates on mortgages, auto loans and other products. They also help you search for insurance policies and negotiate on those policies.
Investment services are a sub-sector of the finance sector that offers investment advice and products, such as mutual funds and stocks. These types of firms may be private, public or non-profit entities.
Banking and financial services are a large part of the economy and they help generate production, employment and income for the population. They also provide a safe place for money to be saved, allowing it to grow in value over time.
Insurance and reinsurance are also part of the financial services industry and they offer protection against a variety of risks such as accidents, natural disasters and theft. They provide both personal and commercial lines of coverage to individuals and businesses.
The industry is heavily regulated and supervisors can impose fines and take over financial institutions that have failed to meet regulatory requirements. These regulations and supervision can help protect the general public from financial harm, but they can’t prevent every failure or error.