The Financial Services Sector

Financial services

A healthy financial services sector is a key barometer of a country’s economy. It provides people with a place to put their savings, gives them loans for mortgages, cars and homes and allows them to invest in businesses. It also protects their health, property and wealth through insurance services. And it allows businesses to grow by providing them with access to capital through the stock market.

The industry is large and wide-ranging, comprising thousands of depository institutions, providers of investment products, insurers, credit and financing organizations and the critical financial utilities that support them. For example, a bank provides deposit facilities like checking and savings accounts; loan associations offer mortgages and personal loans; and brokerage companies provide investment opportunities in stocks, bonds and mutual funds. Banks also provide payment facilities like money transfers and credit card networks.

Other financial service providers include debt resolution firms, which negotiate with creditors to allow consumers to pay less than they owe. Global payment service providers, such as Visa and Mastercard, facilitate credit and debit transactions between individuals and businesses. They also provide clearing and settlement services to facilitate stock, derivatives and commodity trades.

Family offices are investment and wealth management firms that handle the assets of a wealthy individual or family. These firms differ from private banking in that they offer personalized investment strategies and provide high levels of customer service. Other services provided by this sector include structured finance, which develops intricate (typically derivative) products for larger corporate entities or high net worth individuals with more complex financial needs; and insurance underwriting, which assesses the risk of individual insurance policies.

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