The financial services industry provides economic services to its clients. Businesses that are part of the financial services industry include banks, credit-card companies, and credit unions. They all offer various services to their customers, which can include investment and debt management. The services offered by these companies vary, but the main types of financial services are listed below.
Banks
Banks offer a range of financial services that make it easy for people to save money and invest it. These services range from gauging interest rates to the assurance that deposits can be withdrawn. They can also facilitate transfer of funds and account settlement. They can assist businesses and governments with funds by selling shares and bonds and can provide financial advice.
Investment banks
Investment banks offer a variety of financial services. Their activities are usually divided into two broad categories: the sell side and the buy side. The sell side focuses on facilitating transactions and executing deals, while the buy side focuses on providing advice to institutional investors and financial institutions. Examples of buy-side entities are life insurance companies, pension funds, and mutual funds.
Insurance companies
Insurance companies are financial services firms that offer products and services to protect the financial assets of clients. They provide coverage for a variety of risks, including liability and property losses. The insurance industry is divided into several segments. There are brokers and insurance agents, each representing a particular insurance carrier. A broker will shop around for the best possible policy, while an agent will represent the insured. The insurance industry also includes underwriters, who evaluate the risks of insuring clients, as well as reinsurers, which are companies that buy insurance policies and sell them to insurers.
Credit unions
Credit unions offer a range of financial services to members. These services include investing and saving, as well as loan options. Some offer these services through payroll deduction while others require tenure. You should research a credit union’s services and reputation before joining.
Commercial banks
Commercial banks provide a variety of financial services for consumers, businesses, and governments. While most banks have a retail operation, the main function of a commercial bank is to accept and lend money to customers. These financial institutions receive funds from the federal reserve system’s surplus unit, which they store for borrowers, and they also supply funds to deficit units. In the past, commercial banks handled checking accounts, but today, many other institutions handle these services. In addition to providing a variety of services, commercial banks are also involved in tax payment and registration.
Credit card companies
Credit card companies are a major part of the consumer finance sector. As such, they make most of their money from three major sources: fees from cardholders, transaction fees from businesses, and interest from outstanding balances. There are a few things you can do to minimize your exposure to these companies’ profits.
Real estate brokers
Real estate brokers work in a variety of capacities to meet the needs of clients. They promote properties, evaluate their clients’ needs and budgets, and work to attract purchase bids. They also need excellent communication skills and a thorough knowledge of the local market. They may also collaborate with leasing agents.