Financial services are the collection of industries that offer investment, credit and money management products to consumers. When most people think of the industry, they often picture banks, brokers and mortgage lenders. But financial services are much broader than that. They also encompass insurance companies, investment advisors and even Wall Street. The sector is incredibly important, as it provides individuals, small businesses and large corporations with the capital they need to grow.
In the past, each sector of the financial services industry stayed relatively separate. Banks provided a place to store savings and checking accounts, loan associations focused on providing mortgages and personal loans, while brokerage firms offered consumers investment opportunities in stocks, bonds and mutual funds. But since the 1970s, banks began to expand their offerings to match consumer demands. They now offer a wide range of products, from money market and mutual fund accounts to credit cards and mortgages. This expansion has muddied the lines between different sectors, making it more difficult to tell which sector is responsible for which product.
The proliferation of technology has also changed the way financial services operate. Now, many processes that were once manual and time-consuming can be automated. This has benefited both the customers and the companies themselves. For example, Spar Nord, a Norwegian banking company, used Salesforce’s Financial Services Cloud Einstein to create a smarter, more personalized customer experience. The technology uses data to make predictions and recommendations to each customer based on their individual needs. It can be accessed across digital and physical channels, and it helps banks provide more relevant information to their customers.
As the industry evolves, there are many new roles that have been created thanks to technological advancements. For example, a credit card company like Mastercard can now autofill loan applications based on customer behavior and credit history. This can help to save time for customers and speed up application processes. It also allows customers to apply for more products with less hassle.
Other new positions have been created due to the rise of crowdfunding, which is a type of finance that involves collecting a large sum of money from many people. This has opened up a new avenue for entrepreneurs to raise money for their business projects, as well as for consumers to invest in start-ups that they believe in.
As with most industries, the financial services sector is regulated by independent agencies that ensure transparency and fair treatment of their clients. Two of the most important regulatory bodies in this industry include the Financial Industry Regulatory Authority (FINRA) and the Office of the Comptroller of the Currency (OCC).
