The financial services industry provides a wide range of economic services for individuals and businesses. It includes banking, brokerage, mortgages, credit cards, payments services, real estate, and taxes.
The sector serves as a driver of economic growth and supports the financial system. It is regulated by the government and plays an important role in developing the economy.
Traditionally, there were many different types of sectors within the financial services industry that specialized in their own areas of service. For example, banks offered checking and savings accounts, while loan associations provided mortgages and personal loans. Banks also sold investment products, such as mutual funds and stocks.
But as the 1970s rolled in, consumers began to move away from banks and instead started accumulating money with other companies. As a result, the lines that separated financial services became blurred.
Some of these companies were able to merge together, creating bigger financial conglomerates that could earn more and offer even more. Others decided to keep their own independent brands while adding these new divisions within the same holding company as a way to diversify earnings.
Insurance is another large area of the financial services industry. It provides coverage for unexpected events, such as medical bills, damage to property, and loss of income.
Insurance services are offered by a variety of companies, including life, health and auto insurance providers. Some companies specialize in specific industries, such as aviation or marine insurance. Often, these firms work with insurance brokers to underwrite policies for their customers.