Financial services are a sector of the economy that includes banks, brokers, mortgage lenders and even insurance companies. It also encompasses Wall Street and investors.
The financial services industry is vital to a country’s prosperity and overall economy. It is the primary driver of capital and liquidity in the market and enables businesses to manage risk, expand and diversify.
Businessmen utilize the services of financial firms to finance their operations and acquire assets like car, housing or other luxurious items. These services are financed through different forms of credit facilities such as hire purchase finance, leasing and factoring.
Asset management – This is an area of the financial services industry that deals with pensions, hedge funds, mutual funds and more. It also includes insurance companies that handle life, health and property.
Banking – This is one of the financial sectors that is most concerned with saving and lending. It involves large commercial banks, community banks and credit unions. Banks earn their revenue through fees, commissions and spreads on interest rates between loans and deposits.
Insurance – This is a crucial service that protects individuals, families and organizations against risks such as loss of wealth, medical expenses and death. The services include life, health and property insurance as well as re-insurance.
Payment recovery – This is a service that helps sellers accept payment on credit and debit cards in exchange for a percentage of the transaction amount. This service is especially useful when a consumer has paid a vendor who inadvertently didn’t return their deposit or invoice.