The Different Types of Financial Services Providers

Financial services

These days, financial services providers provide a variety of financial products and services. These products and services help people invest in a range of assets, channel cash from savers to borrowers, and redistribute risk. These providers can add value for individuals by monitoring investments, managing investments, and pooling cash to pay policyholders. While people could perform most financial services themselves, it is often more convenient and cost-effective to pay a professional to handle these tasks.

Payment recovery services

Payment recovery is the process of recovering funds that have been paid out erroneously. Payment recovery is very important for large companies, who can incur large losses when their payments are processed incorrectly. However, payment recovery services can also benefit small firms, who may choose to outsource the process to a specialized firm. Here are some of the most common payment recovery services:

Retail banking

In financial services, retail banks use money that consumers deposit to make loans and issue credit. Retail banking is one of the main profit centers of banks, with most maintaining specialized divisions for both corporate and retail banking. By law, retail banks must keep at least 10 percent of their deposit balances liquid, and can lend on 90 percent of them. The banks make money on these loans and deposits through interest and fees charged to consumers. In addition to loans, retail banks also offer other financial services, including private banking and wealth management.

Commercial banking

Commercial banks accept deposits from customers. These deposits are usually in the form of a savings account, checking account, money market account, or a certificate of deposit. When the customer withdraws money from their current account, the bank charges the depositor a service charge. Commercial banks also offer various types of loans, including business loans and mortgages. They also offer personal loans. The purpose of commercial banking is to help people manage their finances.

Investment banking

There are several benefits of working in investment banking. The work environment is highly demanding and involves interaction with the brightest minds in the financial services industry. As a result, entry-level analysts may eventually find themselves holding positions of VP, Director, or Managing Director. A career in investment banking is not for the faint of heart and should not be chosen solely on the basis of the compensation and opportunities for advancement. Rather, one should carefully consider the requirements of the role, and match their skill set to their capabilities, goals, and overall work style.

Consumer financial services

The legal issues surrounding consumer financial services continue to dominate the news cycle. The European Commission has held a public hearing and consultation on the topic, commissioned a special Eurobarometer survey, and now published an action plan to improve the EU single market for retail financial services. The action plan seeks to harness the potential of digitalisation and FinTech. But it’s not just the legal issues that are affecting the industry. It’s also important to look at the role of the European Union and its member states in this arena.