The term “financial services” refers to the economic services provided by the finance industry. It covers a broad range of businesses, from banks and credit unions to credit-card companies. In the United States, financial services companies account for around $2 trillion of GDP. They are vital to everyday life. These companies help individuals, businesses, and governments obtain and manage funds.
Financial services include banking and credit unions, investment management, and insurance. These businesses generate revenue through fees, commissions, and interest rates. Other financial services are tax services, insurance companies, and private equity firms. The number of different types of financial services is nearly endless. While some financial services may not be directly related to investing, other services are vital to the economy.
Insurance services can be used to supplement savings and reduce risk. Insurance companies cover a variety of risks, including business conditions and natural calamities. The financial services industry is regulated by government laws. Through these laws, the public’s savings in financial institutions is protected. Insurers help minimize risks for producers and consumers of financial services.
In addition to traditional banks and credit unions, other financial services include debt resolution and payment service providers. For example, a debt resolution service can help individuals recover from debt that has accumulated through the use of personal loans, credit cards, or merchant accounts. Moreover, financial market utilities include stock exchanges, clearing houses, derivatives, and commodity exchanges. Another important type of financial service is payment recovery, which aids consumers in recovering their funds from vendors.