Financial services are a vital component of the national and world economy. They are comprised of all activities related to the management of money, including deposit-taking, loan and investment services, insurance, debt resolution and payments services.
The industry has been under pressure from technological innovations and changing consumer demands for greater choice, accessibility and control over their personal finance needs. As a result, some companies are expanding their product offerings to include innovative tools that help consumers manage debt, save and invest more easily.
Other companies are consolidating their operations to offer a broader range of financial services. For example, a bank that offers brokerage and mortgage services may merge with an insurance company or mutual funds firm to make it easier for consumers to access all of their financial needs from one place.
In addition, new regulations are allowing banks to buy up other financial services firms and keep their original brands while adding them to their holding company. This allows them to earn more from their combined operations while keeping a separate image and retaining customers.
While it’s tempting to think of all financial services as a commodity, they are not all equal. Some are services while others are goods that last beyond the initial provision. For example, an insurance policy protects people and their assets but it’s also a service that helps them rebuild or replace those things when necessary. An accounting professional can help a small business keep accurate records which reduces their tax liability.