The financial services industry consists of thousands of depository institutions (like banks), providers of investment products, insurance companies and credit-card and lending organizations. The sector also includes accountants, tax-filing and global payment service providers like Visa and MasterCard. Financial services firms are regulated by governments to ensure that they don’t hurt their customers. This helps protect the financial stability of the industry and the economy as a whole.
A financial good is a thing that we own or possess, such as a car or house. Financial services are what we do to it to make it more valuable, secure or functional. For example, if you take out a mortgage to buy a home, the financial services that support that purchase are the bank’s appraisal and inspection. Financial services can also help us save money by helping us invest it or put it away for a rainy day.
Some people confuse financial services with investments or banking, but the fact is that there’s a lot more to it than that. In fact, there are several subsectors of the financial services industry that have their own unique job functions. For instance, an insurance agent is a type of financial services professional that works on behalf of the insured to find them a policy. Similarly, a broker is someone that shops around for the best rate on an insurance policy. Then there are underwriters, who evaluate and accept risk for insurance policies, reinsurance companies and reinsurers, which provide backup coverage for insurers against catastrophic losses, and structured finance, which develops intricate products for high-net worth individuals and their more complicated financial needs.
Financial services are a powerful economic force, and the practices, standards and regulations that this sector adopts affect every other industry in the world. In addition, the financial services sector is responsible for a number of important social outcomes, including helping people to be more resilient to the effects of unexpected events, leading to better physical and mental health, and encouraging saving and investing in the future.
Providing excellent customer service is a top priority for financial services companies, as they strive to offer the best possible experience to their clients. This is especially true for banks, which must balance their need to maintain strict regulatory requirements with the desire to remain competitive and attract new customers. Achieving this balance requires that a financial institution employ the right strategy to deliver the best possible customer experience.
One of the best ways to improve customer experience is to offer a variety of different channels for consumers to interact with the company, from online and mobile to traditional in-person interactions. By offering a variety of channels, a financial services company can build brand loyalty and create more opportunities for revenue generation. This approach also reduces customer frustration and churn. A recent survey showed that 52% of customers were more likely to choose a financial services provider that offered an app. In addition, 72% of people who use apps to manage their finances are satisfied with the quality of those offerings.