Financial services are a set of industries that put money to productive use. Instead of stashing it under their mattress, consumers can give it to intermediaries who will invest it in the next big thing or lend it to them so they can buy a car or a house. This requires a lot of trust, which is why most financial services are highly regulated to protect both savers and borrowers.
Banks are a mainstay of the financial services industry, collecting deposits and lending them to individuals and businesses who need them. They make their money by making a profit on the difference between what they pay to depositors and what they receive from borrowers. Other major players in the field include credit-card companies, global payment networks, and debt-resolution firms.
Investors can also find work in the financial services sector by supplying investment capital to private or public entities in exchange for ownership stakes or profit participation. Venture capital providers, angel investors, and private equity funds fall into this category, as do firms that manage assets on behalf of clients, a practice known as asset management.
Other subsectors of the industry include credit-card issuers and processors, foreign currency exchange services, wire transfer operators, notary service providers, and banks that offer private banking to high net worth individuals. Some financial services companies specialize in only one of these sectors; others, like global banks, are active across multiple fields. The latter are sometimes referred to as conglomerates.