Changing Trends In The Financial Services Industry
Financial services are perhaps one of the oldest and most profitable industries in the world. Financial services are not only a necessary part of our everyday lives, but they are also an important sector within the economy. The financial services industry includes a wide assortment of different companies that deal with money, such as banks, credit-cards, mortgage companies, credit unions and brokers. The financial services industry is estimated to be worth more than $1 trillion annually, making it one of the world's largest economies.
A financial services professional can specialize in a specific area. For example, there are financial advisors who handle stock investments, bonds, derivatives, insurance, investment management, mortgages and the financial products that fall into those categories. Technically, any financial product or service that can be bought or sold on the open market is a financial service. Some examples of financial services include insurance, banking, pension funds, investments, real estate and insurance. As you can see, the financial services industry is quite broad and even further divides into sub-categories and niches.
One sector of the financial services industry that is growing dramatically is investment. This is because the international economy is growing, creating more opportunities for people to invest abroad. Some of the major sectors of this growing sector include asset protection, wealth building, venture capital, global investments and derivatives. Private investors are finding more opportunities for investment in the financial services sector. This is because the growth of emerging economies like India, Brazil, China and South Africa has made it necessary for local firms to take advantage of emerging trends in finance .
Another growing area of the financial services industry is venture capital. Venture capital firms help small enterprises finance their ventures. Venture capital firms typically focus on two types of financing: angel investors and pre-private equity financing. Angel investors are typically wealthy individuals who provide small amounts of money to start a business. Pre-private equity financing involves loans from financial institutions such as banks or private equity firms that pool together money and invest in a business before it becomes public.
International finance sectors are also expanding rapidly. Most Western financial services firms now deal with clients in Latin America and Asia. Many of the banks offer credit facilities to businesses operating in these markets. In addition to credit facilities, these banks offer loan facilities for businesses that need access to working capital.
Finally, another expanding area of the financial services industry is the burgeoning number of credit unions. Credit unions are typically smaller institutions owned by local residents. They are commonly referred to as community banks. A credit union is often able to attract more members due to lower membership rates. This allows credit unions to provide low interest rates on financial services and other products to their members.
Investment banks are another expanding part of the financial services industry. Investment banks provide a variety of financial products to consumers through different types of transactions. These transactions include: corporate loans, commercial real estate loans, securitization of debt, merchant cash advances, mortgages, derivative instruments, and other instruments. Investment banks compete with one another for new business. A few top investment banks include: JP Morgan Chase Bank, Morgan Stanley Bank, Goldman Sachs Group, Merrill Lynch, Lehman Brothers, J.P. Morgan Chase & Co, CitiBank, Prudential Securities, Morgan Stanley and several others.
The financial services industry also includes a number of groups that focus on specific aspects of the industry. Insurance companies offering both life and health insurance; asset management and investment companies; investment firms offering a range of financial products; energy firms which specialize in wind, solar, geothermal, hydro and other green technologies; and commodity brokers provide products associated with agricultural, mining, oil and gas industries. Insurance companies also dominate this sector. Examples include: American Home Mortgage Corporation, Mutual Life Insurance Company, General Reinsurance Company, Infinity Life Insurance Company, and Worldwide Brands. Some of these sectors may appear to be losing steam as other sectors gain ground, but this is a long-term trend.