Financial services are an essential part of the world’s economy. They help individuals and businesses to save, spend and invest their money.
The financial services industry includes banking, insurance, payment systems, investment products, and financial market utilities. These firms earn revenue through fees and commissions.
Banks provide loans and accept deposits from customers. In exchange, the banks earn revenues through interest rates. Investment firms develop and sell complex products for high net worth individuals.
Insurance is another important subsector of the financial services industry. It provides coverage for risks such as property damage, liability, and injury. Other types of insurance include life and health insurance.
Payment system providers transfer funds between payers and recipients through electronic funds transfers and checks. They may also purchase commodities.
Conglomerates are active in many financial services sectors. They may be in retail banking, investment banking, asset management, general insurance, and wholesale banking.
New product providers are reshaping the financial services industry. This means that banks will need to compete in a new customer marketplace. To do this, they will need to become more transparent. This will expose weaknesses in their business and enable them to provide new products and services to existing and potential customers.
Banks must rethink their customer service. They must use technology to ensure that their clients have a positive experience with their institution.
Digital technology is reshaping the financial services industry. In addition to disrupting traditional financial models, it is also destroying established business models in music and publishing.