Financial Services

‘Financial services’ is a broad term used to refer to a number of services including banking, debt securities, insurance, equity securities, credit card services, mortgage services, stock brokerages and much more.

Recently, there is a change in trend in the financial industry, banks, brokerage companies and insurance and other investment companies those projected themselves with the labels listed above started presenting themselves as financial services companies. They do not use the service specific labels anymore.

Though they use a common term, Financial Services Institution, their operations are limited to what actually they represent, either banks or insurance company or brokerage house etc.

Banks as the financial service institution have common mode of operations. Their primary responsibility is safekeeping of the money deposited by its customers. Banks allow both deposits and withdrawals. They provide their customers with various tools using that will help them to interact with the bank. Few such things to list, checkbooks, debit cards, ATM cards, set up ATM outlets for withdrawal of money, provide different types of loans such as home loans, educational loans, mortgage loans, business loans etc.

Credit card companies serve as another type of financial service institution. Credit cards allow the user to purchase goods at retail outlets without paying the real paper money. They allow the user to take advantage of the credit limit they are allowed. The credit card company sends monthly statements consolidating all the purchases the user made during the month for the bills to be paid to the credit card company. This way the user does not have to carry the paper money; also one can shop without having any money in hand or bank. All the purchases are made anticipating a future income to settle the bill.

Another major financial service is provided by the insurance companies. There are different types of insurance policies available – life insurance, health insurance, motor insurance, property insurance etc. Lot of insurance companies invest the money in the share market to ensure greater returns to its customers. These companies have a fund manager who will study the market and invest its client’s funds so as to get good returns. This way insurance companies try to lure more people to invest in their policies. Furthermore, a lot of people invest in insurance policies to avail tax benefits. The insurance sector is booming with more and more people investing their money with these companies to see fast and high returns.

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