Financial services are the businesses that deal with the management of money and involve banking, lending, investing, saving and borrowing. They also include the critical financial market utilities that facilitate payment transactions and settlement systems. Financial services companies serve individuals, small business, large corporations and even the government.
The financial services industry is made up of banks, securities firms, insurance companies, credit unions and mortgage lenders. They are also the providers of critical financial market utilities such as stock and bond markets, exchanges and clearing houses, commodity and derivative exchanges, payment and settlement systems.
Another vital part of the financial services industry is investment services. These companies help people manage their investments by offering advisory services and access to a wide range of investment products. They may also provide advice on wealth management and estate planning. These companies are also involved in risk management by offering products such as life and health insurance, property and liability insurance, or by hedging against risks through financial instruments like futures contracts.
Regulatory services are offered by independent agencies that oversee and uphold transparency in the financial services industry. These agencies are important for maintaining a level playing field and preventing fraud. They also offer support for the industry by assisting in mergers and acquisitions, debt restructuring and providing venture capital to new companies. They may also work to establish and maintain payment systems such as commercial paper or interbank transfer systems. Lastly, they may be involved in the provision of loan guarantees.