Financial services are services that the finance industry provides to its customers, be it individuals or other organizations. The industry includes a large number of organizations that deal with monetary management. Investment funds, stock brokerages, credit card, consumer finance & insurance companies, banks, and some enterprises that are sponsored by the government, these would be some of the organizations that build up the finance industry. In 2004, this industry was a representation of about 20% of the USA market capitalization. The Gramm-Leach-Bliley Act played a significant role in making the phrase “financial services” more common in USA during the late 1990s, it helped different organizations, in the U.S.A. operating in this particular service industry at that time, to merge. The most common type of a financial service is banking. It is the most widespread form of providing financial services, so much, that even the less developed countries have them. Here are some of the key functions of a bank
• Keeping their customers’ money safe
• Also allowing withdrawals when they need the money
• Issuing checkbooks
Checks were also widely used in order pays large sums of amount, until credit cards were extensively available
• Issuing credit cards
And handing out the transactions and bills to the owners
• Providing loans
Be it personal loans, mortgage loans & commercial loans (typically loans for purchasing a home, business and/or property)
• Allowing easy financial transactions
By placing Automatic Teller Machines (ATMs) at easy access to customers
• Provide fund transfers
And Electronic transfers of funds between banks
• Giving facilities to customers
Such as direct debits and standing orders, so that automatic payments can be completed
• Attorney service
For providing financial documents and others
Foreign exchange service is a service that many banks around the world provide.
These services include:
Currency Exchange – clients can buy currency notes of different countries
Wire transfer – customers can send money to banks out of this country, in more simple words money transfer (western union)
Foreign Currency Banking - banking transactions can be done in overseas currency Another such institution would be insurance companies. Some of the functions of an insurance company are:-
Insurance brokerage - Insurance brokers buy insurance on behalf of their customers. Recently a lot of websites have been formed to give customers basic price comparisons for such as services, causing debates within this industry.
Reinsurance - is insurance provided to insurance companies themselves, to defend them from shattering losses.