Financial services are all the activities that businesses, governments and individuals engage in to further their economic goals and meet their monetary obligations. They include everything from buying and selling products, to borrowing and lending money and issuing shares. They also include payment systems and credit card networks.
Banks are well known for their work in this sector, from handing out deposits to loaning out money to customers. But it’s also an industry that deals with a lot of data – analysing customer information to understand their needs and then tailoring the right product or service at the right time. This is known as ‘Lifecycle Banking’ – anticipating the needs of customers at key points in their life, such as moving house or getting married, and then offering them relevant products and services.
The other key area for financial services is providing investment and advisory services to businesses and individual investors. These can range from advising on investments to carrying out due diligence for companies or aiding with real estate ventures. Alternatively, they can provide debt resolution services or financial market utilities (such as stock exchanges and clearing houses) that facilitate trading of stocks, derivatives and commodities.
These days, there is an increasing emphasis on transparency in financial services. Firms that are held to fiduciary standards are required to put their customers’ interests first and must only recommend products and services they believe to be suitable. They must also disclose any fees or charges they may have.