In general, financial services encompass a broad range of businesses that provide economic services to their customers. They include credit unions, banks, and insurance companies. In addition, they may provide tax and accounting services. However, the industry is not limited to these businesses. There are many other types of financial services, too. Here’s a look at some of the most common ones. Depending on your needs, you might choose to work with one of the many different types of financial institutions.
Banks
Banks offer a variety of financial services, including loans, mortgages, and credit cards. They also offer financial advice and stock investment advice. These services complement one another.
Credit unions
If you want to borrow money, a credit union is a good place to go. They offer many of the same financial services as a bank, but you may find them to offer better terms and higher service quality. You can find credit unions in your area or nationwide.
Insurance companies
Insurance companies provide financial protection to individuals and businesses by underwriting economic risks. Insurers offer two main types of insurance: life insurance and property insurance. While life insurance tends to be a short-term contract, property insurance extends to cover a long-term loss. Insurers must evaluate a vast array of information to determine the appropriate level of protection.
Tax and accounting firms
Tax and accounting firms offer a variety of services to their clients. Some of them may offer bookkeeping, payroll, financial planning, or other services to their clients. These additional services can increase the profitability of a tax and accounting firm and may draw potential clients. Small firms should regularly examine their profitability and decide whether or not to add new services.
Private equity firms
Private equity firms in financial services have the unique ability to bring long-term value to a company. For example, Nordic Capital has sold Bambora to Ingenico for EUR1.5 billion, and Point International to Verifone for US$1 billion. And Permira invested in Klarna, which has since received a banking license.
Investment banks
Investment banks are financial services firms that provide advice to investors and help them invest in financial assets. These firms typically have an international footprint, with operations across countries and exchanges. The activities of investment banks are divided into two main groups: sell side and buy side. Sell side activity includes trading securities and facilitating transactions. Buy side activity involves providing advice to institutions, including life insurance companies, unit trusts, and private equity funds.