Financial services are the companies that facilitate money transactions between businesses and consumers. They include the central bank; depository institutions, such as banks, building societies and credit unions; payment systems and services; and insurance. This industry also includes other financial intermediaries, such as brokerage firms, investment funds, leasing companies and hire purchase, and any company that provides a range of other financial products and services.
In recent years, the financial services sector has seen rapid growth due to changes in technology that have opened up new markets and made some traditional financial products more accessible. For example, it has become easier to invest in stocks and mutual funds through online brokerage accounts. Some companies have even begun to merge with other companies in the finance industry to expand their product offerings, a practice known as consolidation.
Some of the more common types of financial services are banking, investing, asset management and insurance. The most well-known form of this is a bank, which provides a wide range of basic services such as checking and savings accounts, as well as loan and credit card services.
Another important type of financial service is the investor or private equity sector, which provides investment capital to businesses in exchange for ownership stakes or profit participation. This is a vital part of the economy because it allows for the expansion of businesses that otherwise wouldn’t be able to obtain necessary funding from other sources. Finally, the insurance sector offers products that protect against unforeseen risks. This can be anything from life or health insurance to property or liability insurance.