The Financial Services Industry

Financial services is a huge industry that covers all the institutions that deal with money. These include banks, credit card companies and credit unions. It also includes private equity firms and venture capitalists, which supply investment funds to small companies in return for ownership stakes or profit participation. This industry is also home to insurance companies, which offer protection against loss or damage of assets (e.g., health or auto insurance), against liability or lawsuits, and against the possibility of losing your house or business to a fire or flood.

Banks offer the most obvious of financial services, storing your money and then lending it out to others who need it. This helps them make a profit by charging interest. But financial services go well beyond banking, and include things like pawn shops, insurance agencies and even global payment providers such as Visa and Mastercard.

This sector is vital for economic growth because it enables people to save and invest their money. It also provides them with protection against some causalities and helps businesses in their formation and expansion both domestically and internationally.

The financial services industry is a lifecycle-based one, meaning that the services it offers are tailored to the specific needs of customers at different stages of their lives and in response to significant events. For example, many people get married or buy a home at some point, and their bank may provide them with products and services that are relevant to those big decisions.