Financial services are a service offered relating to the world of finance. Finance companies such as banks, credit card companies, investment funds, stock brokerages, and consumer finance companies are all considered financial services. It was found in 2004 about 20 percent of the market capitalization in the S&P 500 of the United States are all in the financial sector.
The term financial services was coined in the 1990’s as a result of the Gramm- Leach Bliley Act. During the 1990’s many of the banks, insurance companies, and other financial companies were able to merge. Banks could buy insurance companies creating a brand for a specific financial business making a holding company.
Banking services are the largest financial services in the United States and world. Their primary objective is to provide a safe place for money to be kept, offer check books, personal loans, mortgages, and credit cards. In the banking sector there are private banks which work exclusively with high net worth individuals. Capital market banks are underwriters for debt and equity dealing primarily with the public banking sector by offering products to the consumer banks for them to offer to their consumers.
Financial services include asset management, hedge fund management and custody services. These financial services relate to the stock market for investment purposes. Insurance is the second largest industry in financial services. Heath insurance, property insurance, stock insurance, and life insurance are a few of the products sold in this financial sector. The financial sector structures the economy by showing how much can be spent and the size of different debts.