Financial services are all the products and processes that help put money to productive use. From saving for a rainy day to financing the next big invention, these intermediaries help people invest their savings and take on debt to fulfill their needs. Because of the immense trust required between savers and borrowers, most countries regulate the industry to protect consumers and foster confidence.
The financial services sector includes credit card companies, global payment providers like Visa and Mastercard, banks, credit unions, mortgage companies and loan companies. It also includes insurance companies (both life and non-life) and reinsurers, as well as brokerage firms that sell and buy securities and other assets. It even encompasses debt resolution services, accounting firms, currency exchange and wire transfer services, as well as global market-making operations.
To offer the best possible financial services, it’s important to understand your customers’ needs and life cycles. This is why many banks and credit unions provide tailored products for their clients, such as mortgage loans for first-time homeowners or savings accounts designed to encourage regular saving. Some banks even track customer engagement with other products or spending habits to anticipate pivotal moments in their customers’ lives, such as a marriage or the purchase of a home.
Another key aspect of financial services is the role played by independent regulatory agencies. These bodies oversee different sectors of the industry and promote transparency and accountability. They may also enforce penalties on businesses that break the rules.