Financial services are the economic services provided by the finance industry, which encompasses a broad range of business activities. These include credit unions, banks, credit-card companies, brokerage firms, investment funds and more. This sector has a significant impact on the economy and is often seen as one of the most important drivers of economic growth.
While the financial services industry seems all-encompassing today, it wasn’t always that way. Before the 1970s, different sectors of the industry remained relatively separate from each other. Banks offered checking and savings accounts, while loan associations specialized in mortgages and auto loans. Brokerage companies focused on offering consumers investment opportunities in stocks, bonds and mutual funds. And credit card companies like Visa and MasterCard primarily offered credit cards.
Nevertheless, it is now common for a company to offer several of these different types of services. For globalEDGE’s purposes, all work related to money and asset management is considered part of the financial services industry.
In addition to providing traditional banking services, financial services also include payment processing providers and credit-card networks as well as debt resolution services. These areas are crucial to a well-functioning economy because they allow businesses and individuals to obtain the funding needed to thrive and grow. For example, a company that is able to secure a loan from a financial institution will be able to invest in new equipment and hire more employees, ultimately leading to a higher level of productivity.