Financial services are the businesses and activities that help individuals, corporations and governments manage money. They involve the inflow and outflow of funds, investments, savings and borrowing. Financial services also include the redistribution of risk, such as through insurance and banking. This sector is vital to the economy and is often considered the backbone of a country’s finances.
The banking industry is the most common component of the financial services group, which includes credit unions, community banks and large commercial institutions. They earn their income through fees and commissions, such as the spread of interest rates between loans and deposits. Credit card companies and brokerage firms are also part of the financial services industry. They earn revenue through commissions and sales of investment products like mutual funds.
In addition, financial services companies offer consumer protection, taxation and accounting services. For example, accountants can help small businesses keep proper records to ensure they are paying the right amount of taxes. They can also provide advice on investing and saving.
A growing number of consumers are turning to digital platforms for many of their financial needs. This has opened up new opportunities for financial services companies, including a variety of new ways to engage with customers and offer them innovative tools that can make it easier to manage their money. Salesforce and Einstein are helping financial services companies become more customer-oriented by delivering predictions on their clients’ next best actions, as well as giving them the ability to quickly respond to customer inquiries via any channel.