Financial services is a broad category that includes a wide range of companies and organizations. It can include banks, credit unions, stock brokers, insurance companies, and other businesses that manage or sell money.
The industry grew up in response to a consumer demand for broader products and more options, and it became more profitable for companies to merge together into bigger financial conglomerates. Banks merged with insurance companies, investment banks, and brokerages to offer more products and earn more profits.
A key benefit of financial services is that it encourages people to save and invest, which helps them improve their standard of living. It also provides a way for people to buy goods and services by loaning or borrowing money, which is what makes an economy function.
Investment banking focuses on raising funds for businesses. It enables them to raise capital by issuing securities and other instruments in the market.
Private equity funds, venture capital providers, and angel investors supply funding to new companies in exchange for ownership stakes or profit participation. This is a very different kind of business from the more familiar investment banks, but it’s still part of financial services.
The financial services sector is one of the largest sectors in the economy and plays an important role in the development of economies around the world. It also helps ensure that a country’s currency remains stable and that there is a free flow of capital throughout the economy.