When you hear the phrase “financial services,” you probably think of banks, stock brokers and mortgage lenders. But these are just the tip of the iceberg when it comes to this massive industry that serves individuals, small businesses, large corporations, nonprofits and even governments. Financial services encompass everything that touches money — from storing it to lending it out to spending it.
One of the most common types of financial services is investment banking, which helps companies raise money by underwriting debt and equity offerings. Other investment services include M&A advice, due diligence, valuation and restructuring. These services are offered by a wide range of firms, from boutique domestic consulting companies to huge multinationals.
Another key area of financial services is capital markets, which help companies acquire the funds they need to expand operations and produce more goods. A healthy capital market is a good barometer of a country’s economic health, and it’s essential for fostering growth and development.
Finally, the last major category of financial services is insurance, which provides protection against unforeseen risks like natural disasters or theft. This type of service is a necessity in any economy, and it’s often offered by large global insurers. In smaller markets, local or regional insurance providers may also offer these services. Regardless of the specifics, all these services are vital to a functional financial system. And when they work well, the overall economy thrives. When the system falters, though, the results can be devastating.
