Financial Services
FINANCIAL SERVICES INDUSTRY
Financial service is a broad term used to describe the various offerings within the finance industry–encompassing everything from insurance and money management to payments and digital banking technology.
There are a multitude of stakeholders and moving parts within financial services, from credit card issuers and processors, to legacy banks and emerging challengers. And with financial activity becoming increasingly digitized, especially as consumers are choosing to manage their finances from home amid the ongoing coronavirus pandemic, financial institutions and startups are sharpening their technology and expanding remote services.
Financial Services Industry:
- Personal Finance
- Consumer Finance
- Corporate Finance
Types of Financial Services
Accounting is the process of analyzing a company's financial parameters and presenting them to investors and managers so they may decide how to invest money and adjust management techniques.
A brokerage is a business that acts as an agent for the acquisition of stocks or other financial products. Full-service brokerage businesses conduct market research and give their clients recommendations on the securities to purchase. Clients include portfolio and pension fund managers.
Consumer finance refers to the provision of loans or other forms of credit to consumers, which includes credit cards and vehicle loans. Additionally, it contains loans for higher education students.
Credit cards are tools that enable cardholders to make purchases online or over the phone without spending cash. A credit line with interest is provided to the customer by the bank that issues the card.
Foreign exchange is the process through which people or businesses change one currency into another to order to carry out international transactions. With a daily turnover in trillions of dollars, it is the largest sector of the financial market.
Private limited partnerships with a sizable initial commitment are hedge funds. The funds often have a lock-up term of at least one year, and they have little liquidity. Due to their adaptability and wide range of investment alternatives, hedge funds assist investors in reducing their overall risk.
An individual or business can use insurance as a risk management strategy to transfer the risk of financial loss to an insurance company in exchange for a one-time or recurring charge.
Corporations can issue stocks and obtain funds with the help of an investment bank. For businesses, investment banks underwrite new debt and equity securities. Their clients receive advice from them regarding mergers and acquisitions.
Private banking refers to a group of specialized financial services that banks provide to high-net-worth clients who make significant investments.
By controlling a sizeable share of a company's stock through private equity, an investor can increase his or her returns. A private equity fund will frequently take over a business and use the profits to pay itself back.
Instead of organizations, individuals are offered retail banking services. Opening savings accounts, obtaining personal and mortgage loans, making deposits, and utilizing ATM, credit, and debit cards are all made easier by retail banking.
Venture capital is the first start-up funding given by an investor to the owner of a novel, possibly lucrative business concept in exchange for a percentage of the startup company's future profits. Long-term investments are the focus of venture capital firms. Funds for venture capital are a huge help to start-ups without access to the financial markets.
By letting the wealthy know about investment opportunities and assisting them in selecting the best financial products, wealth management (also known as asset management) aims to help them maximize the returns from their investments.
