What are Financial services? Well, they are the means by which we access money, facilitate payments and save our hard-earned savings. They also create jobs. What are some of the benefits of Financial services? Read on to learn more. Listed below are some of the most common ones. These types of services include:
Financial services are a source of finance
A major part of the financial services industry is insurance. Insurance services protect people and assets from disasters, death, injuries, loss of property, and liability. Insurance agents and brokers represent the insurer and the insured, shopping for the best policy. Underwriters assess the risk involved in insuring clients, lending money to financial institutions, and advising investment bankers on the loan risk. Reinsurers provide insurance to insurers to cover them against catastrophic losses.
While the banking industry is the foundation of the financial services sector, it includes other aspects of finance. Among other things, financial services include investments, insurance, redistribution of risk, and credit card issuers. The banking industry is comprised of large commercial banks, community banks, credit unions, and other entities. The companies providing these services earn revenue through interest rates, fees, and commissions. These services are essential for a healthy economy.
They provide a source of savings
Savings banks are community banks that take deposits from local residents and then loan out money in the form of consumer loans, mortgages, and small business loans. These banks also have many of the same products and services as commercial banks, and are regulated by the Office of Thrift Supervision, a federal agency that manages the Savings Association Insurance Fund. Sovereign Bancorp is one such bank, with branches in nine Northeastern states.
Consumers and businesses benefit from the growth of the financial services industry. Consumers gain more purchasing power as they can afford the products they need. Companies receive more investment capital, which in turn spurs more production. As a result, the financial services sector helps companies meet this demand and attracts foreign funds. However, these services have their share of complaints, and the government has a long way to go before reforming them.
They create employment
In the recent past, Fidelity Investments and Fifth Third Bank have been announcing hiring sprees. Each of them says it needs more employees for customer service and retail banking. The hiring sprees were spurred by an immediate economic shock, such as the financial crisis. These companies have also been increasing their digital investment and have been re-tooling their workforce to meet the demands of the new digital environment. While the financial services sector has been in decline in recent years, some industries like retail banking have seen a recent uptick.
As the number of individuals seeking careers in financial services continues to grow, more jobs will be created. For example, investment banking is a large employment provider that contributes almost 5% of Gross Value Added. And, the financial industry also employs a variety of non-financial companies. Some of these firms are non-banking, including hedge funds and credit card companies. Other companies in this sector create employment in a variety of ways, such as insurance.