Financial services are a broad collection of institutions that help people save, invest, manage risk and borrow. They include central banks; depository institutions such as commercial banks, savings banks and credit unions; brokers; investment firms; money market mutual funds; and insurance companies. Financial services also include debt resolution, a process that helps consumers manage unmanageable debt or avoid bankruptcy. Finally, a number of other services are provided by the financial industry, including payment systems like real-time gross settlement systems and interbank networks, and securities research, which maintains departments that service traders and clients and publish research reports on securities and industries.
In the past, each sector of the financial services industry stayed within its own specialty. Banks offered checking and savings accounts; loan associations provided mortgages and automobile loans; and brokerage firms bought and sold stocks, bonds and mutual funds on behalf of investors. However, in the 1970s, consumer demand for a more comprehensive range of financial products and services drove these sectors to begin offering other products.
Today, the lines that separate these sectors are blurry. For example, a bank might buy a brokerage firm or an insurance company and offer its customers a bundled product. This approach can be beneficial for both the buyer and seller, as it reduces the cost of doing business and increases the amount of revenue that can be earned.
The demand for these types of services is growing rapidly. With more and more people putting away money for retirement or to purchase homes, the need for these financial services will only increase. This will create a lot of jobs and will improve the economy of the country.