Which Two Statements About Financial Service Companies Are True?

Economic service provided past the finance industry

Financial services are the economical services provided past the finance industry, which encompasses a broad range of businesses that manage coin, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers, and some government-sponsored enterprises.^[1]

Financial Services Authorization Seychelles logo on building

History [edit]

Change in admission to a financial business relationship or services between 2005 and 2014 by country^[2]

The term "fiscal services" became more prevalent in the United states of america partly as a consequence of the Gramm–Leach–Bliley Human activity of the late 1990s, which enabled unlike types of companies operating in the U.Due south. financial services industry at that time to merge.^[3]

Companies ordinarily have 2 distinct approaches to this new blazon of business organization. One approach would be a bank that just buys an insurance visitor or an investment bank, keeps the original brands of the caused house, and adds the acquisition to its belongings company just to diversify its earnings. Outside the U.S. (e.g. Japan), non-financial services companies are permitted within the holding visitor. In this scenario, each company still looks independent and has its own customers, etc. In the other style, a bank would simply create its own insurance division or brokerage division and attempt to sell those products to its ain existing customers, with incentives for combining all things with i company.

Relationship to the regime [edit]

The fiscal sector is traditionally among those to receive regime support in times of widespread economic crisis. Such bailouts, however, enjoy less public back up than those for other industries.^[iv]

Banks [edit]

Main article: Banking concern

Commercial banking services [edit]

A commercial banking company is what is commonly referred to as simply a bank. The term "commercial" is used to distinguish information technology from an investment bank, a blazon of financial services entity which instead of lending coin direct to a business, helps businesses raise money from other firms in the form of bonds (debt) or stock (equity).

The master operations of commercial banks include:

• Keeping money rubber while also allowing withdrawals when needed
• Issuance of chequebooks so that bills can be paid and other kinds of payments tin can be delivered by the mail service
• Provide personal loans, commercial loans, and mortgage loans (typically loans to purchase a home, holding or business)
• Issuance of credit cards and processing of credit card transactions and billing
• Issuance of debit cards for use as a substitute for cheques
• Allow financial transactions at branches or by using automatic teller machines (ATMs)
• Provide wire transfers of funds and electronic fund transfers between banks
• Facilitation of standing orders and directly debits, so payments for bills can exist made automatically
• Provide overdraft agreements for the temporary advocacy of the depository financial institution'south ain coin to meet the monthly spending commitments of a client in their current account.
• Provide internet banking system to facilitate the customers to view and operate their respective accounts through the internet.
• Provide accuse card advances of the bank's ain money for customers wishing to settle credit advances monthly.
• Provide a check guaranteed by the depository financial institution itself and prepaid past the client, such every bit a cashier's check or certified bank check.
• Notary service for financial and other documents
• Accepting the deposits from customers and provide credit facilities to them.
• Sell investment products like mutual funds Etc.

The United States is the largest location for commercial banking services.

Investment banking services [edit]

Singapore financial district past night (25449263528)

• Underwriting debt and equity for the private and public sector for such entities to raise capital.
• Mergers and acquisitions – Work to underwrite and advise companies on mergers or takeovers.
• Structured finance – Develop intricate (typically derivative) products for loftier net worth individuals and institutions with more intricate financial needs.
• Restructuring – Assist in financially reorganizing companies
• Investment direction – Direction of assets (e.g., existent manor) to encounter specified investment goals of clients.
• Securities research – Maintain their own department that services to aid their traders, clients and maintain a public stance on specific securities and industries.
• Broker Services – Buy and sell securities on behalf of their clients (sometimes may involve financial consulting besides).
• Prime number Brokerage – An exclusive blazon of arranged banker service specifically meant to service the needs of hedge funds.
• Private banking – Private banks provide banking services exclusively to high-net-worth individuals. Many financial services firms require a person or family to accept a certain minimum net worth to authorize for individual banking service.

New York City and London are the largest centers of investment banking services. NYC is dominated by U.S. domestic business organisation, while in London international business organization and commerce make up a meaning portion of investment banking activity.^[5]

Foreign exchange services [edit]

FX or Strange exchange services are provided by many banks and specialists foreign exchange brokers around the world. Foreign commutation services include:

• Currency exchange – where clients can purchase and sell foreign currency banknotes.
• Wire transfer – where clients tin send funds to international banks away.
• Remittance – where clients that are migrant workers send money back to their home state.

London handled 36.vii% of global currency transactions in 2009^[update] – an boilerplate daily turnover of United states of america$1.85 trillion – with more U.s. dollars traded in London than New York, and more Euros traded than in every other city in Europe combined.^{[half-dozen] [vii] [8] [ix] [10]}

Investment services [edit]

• Collective investment fund – A fund that acts equally an investment pool so investors can put money into a fund that volition reinvest it into a variety of securities based upon their common, outlined investment goal.
• Investment Advisory Offices – Run past registered investment advisors who advises clients in fiscal planning and invests their money.
• Hedge fund management – Hedge funds often utilize the services of "prime brokerage" divisions at major investment banks to execute their trades.
• Individual equity – Private equity funds are typically closed-finish funds, which usually accept decision-making equity stakes in businesses that are either private or taken private once acquired. Private equity funds often use leveraged buyouts (LBOs) to acquire the firms in which they invest. The about successful private disinterestedness funds tin generate returns significantly higher than provided by the disinterestedness markets.
• Venture capital – Individual disinterestedness capital typically provided by professional, exterior investors to new, loftier-growth-potential companies in the interest of taking the company to an IPO or merchandise sale of the business. Startup companies are typically fueled past an affections investor.
• Family office – Investment and wealth direction firm that handles a wealthy family or small group of wealthy individuals with financial plans tailored to their needs. Similar to individual banking.
• Advisory services – These firms (or departments within a larger entity) service clients with financial advisers who serve equally both, a banker besides every bit a financial consultant.
• Custody services – the condom-keeping and processing of the world's securities trades and servicing the associated portfolios. Assets under custody in the earth are approximately U.s.$100 trillion.^[xi]

New York City is the largest center of investment services, followed by London.^[12]

Insurance [edit]

National Insurance Services (NIS) – St. Vincent ^ the Grenadines – panoramio

• Insurance brokerage – Insurance brokers shop for insurance (mostly corporate belongings and casualty insurance) on behalf of customers. Recently several websites have been created to give consumers bones price comparisons for services such as insurance, causing controversy within the industry.^[thirteen]
• Insurance underwriting – Personal lines insurance underwriters actually underwrite insurance for individuals, a service still offered primarily through agents, insurance brokers, and stock brokers. Underwriters may too offering similar commercial lines of coverage for businesses. Activities include insurance and annuities, life insurance, retirement insurance, health insurance, and holding insurance and prey insurance.
• Finance and insurance – a service still offered primarily at asset dealerships. The F&I director encompasses the financing and insuring of the asset which is sold by the dealer. F&I is often called "the second gross" in dealerships that have adopted the model
• Reinsurance – Reinsurance is insurance sold to insurers themselves, to protect them from catastrophic losses.

The Usa, followed past Nippon and the United Kingdom are the largest insurance markets in the world.^[14]

Other financial services [edit]

• Angel investment networks – A grouping of affections investors can create their own network to be the financial foundation for futurity companies.
• Credit card networking – Companies that serve as the span between the retailers and the banks who issue the bank cards. Major credit card networks are: Mastercard, Visa Inc., Rupay, American Express and Discover Financial.
• Conglomerates – A financial services company, such as a universal banking concern, that is active in more than than one sector of the financial services market e.g. life insurance, general insurance, health insurance, nugget management, retail cyberbanking, wholesale banking, investment banking, etc. A key rationale for the beingness of such businesses is the existence of diversification benefits that are nowadays when different types of businesses are aggregated. As a outcome, economic capital for a conglomerate is ordinarily substantially less than economical capital is for the sum of its parts.
• Debt resolution – A consumer service that assists individuals that take too much debt to pay off as requested, but practise non desire to file bankruptcy and wish to pay off their debts owed. This debt can be accrued in diverse ways including simply non express to personal loans, credit cards, or in some cases merchant accounts.
• Financial market utilities – Organizations that are office of the infrastructure of financial services, such every bit stock exchanges, clearing houses, derivative and article exchanges and payment systems such as existent-time gross settlement systems or interbank networks.
• Payment recovery – Assistance in recovering money inadvertently paid to vendors by businesses, such as past adventitious duplicate payment of an invoice or failure to render a eolith.

Financial exports [edit]

A financial export is a financial service provided by a domestic house (regardless of ownership) to a foreign firm or individual. While financial services such as banking, insurance, and investment management are frequently seen as domestic services, an increasing proportion of financial services are now being handled abroad, in other financial centres, for a diverseness of reasons. Some smaller financial centres, such as Bermuda, Luxembourg, and the Cayman Islands, lack sufficient size for a domestic financial services sector and have developed a role providing services to non-residents every bit offshore financial centres. The increasing competitiveness of financial services has meant that some countries, such as Japan, which were one time self-sufficient, have increasingly imported financial services.

The leading financial exporter, in terms of exports less imports, is the United Kingdom, which had $95 billion of financial exports in 2014.^[fifteen] The UK'southward position is helped by both unique institutions (such every bit Lloyd's of London for insurance, the Baltic Substitution for shipping etc.)^[16] and an environment that attracts foreign firms;^[17] many international corporations have global or regional headquarters in the London and are listed on the London Stock Commutation, and many banks and other financial institutions operate there or in Edinburgh.^{[eighteen] [xix]}

Meet likewise [edit]

• Alternative financial services
• Financial analyst
• Financial criminal offence
• Financial information vendors
• Financial markets
• Financial engineering science
• Financialization
• Insider threat
• International monetary fund
• List of banks
• Listing of investment banks
• List of countries past share of population with admission to financial services
• List of largest financial services companies past acquirement
• Valuation (finance) § Valuing financial service firms

References [edit]

1. ^ Asmundson, Irena (28 March 2012). "Fiscal Services: Getting the Goods". Finance and Evolution. IMF. Retrieved viii September 2015.
2. ^ "Access to a fiscal business relationship or services". Our World in Data . Retrieved 15 February 2020.
3. ^ "Neb Summary & Status 106th Congress (1999–2000) Southward.900 CRS Summary – Thomas (Library of Congress)". Archived from the original on 2013-08-12. Retrieved 2011-02-08 .
4. ^ The Economist, Apr 4th 2020, page 51.
5. ^ Roberts, Richard (2008). The Urban center: A Guide to London'southward Global Fiscal Center. Economist. p. 2. ASIN 1861978588.
6. ^ "Research and statistics FAQ". The Metropolis of London. Archived from the original on 26 September 2011. Retrieved 23 February 2012.
7. ^ "Triennial Central Bank Survey – Strange exchange and derivatives market action in 2004" (PDF). Banking concern for International Settlements. March 2005. Retrieved 2018-03-05 .
8. ^ "Key facts Archived 4 June 2012 at annal.today", Corporation of London. Retrieved 19 June 2006.
9. ^ European Central Banking company (July 2017) "The international office of the euro". European Central Banking concern. p. 28.
10. ^ Chatsworth Communications (April 6, 2016) "London's leading position as a USD 2.2 trillion hub for FX trading would exist harmed by a Brexit, according to poll of currency market professionals". Chatsworth Communications.
11. ^ "Prudential: Securities Processing Primer" (PDF). cm1.prusec.com. Archived from the original (PDF) on 2007-03-16. Retrieved 2010-12-05 .
12. ^ "Asset Management in the Great britain 2016–2017" (PDF). The Investment Direction Association. September 2017. p. 12. Archived from the original (PDF) on half-dozen March 2018. Retrieved five March 2018.
13. ^ "Price comparison sites face probe". BBC News. 2008-01-22. Retrieved 2009-02-06 .
14. ^ "United kingdom Insurance & Long Term Savings Central Facts 2015" (PDF). Association of British Insurers. September 2015. Retrieved five March 2018.
15. ^ "UK merchandise surplus in financial services highest e'er". TheCityUK. 21 July 2015. Retrieved 5 June 2015.
16. ^ Clark, David (2003). Urban world/global city. Routledge. pp. 174–176. ISBN0415320976 ; Shubik, Martin (1999). The theory of money and financial institutions. MIT Press. p. viii. ISBN0262693119.
17. ^ Roberts, Richard (2008). The Urban center: A Guide to London's Global Fiscal Middle. Economist. pp. ane–22. ISBN9781861978585.
18. ^ "United kingdom'south financial services trade surplus biggest in the earth, dwarfing its nearest rivals". TheCityUK. 3 July 2014. Retrieved five June 2015.
19. ^ "Special report on services exports" (PDF). EY Item Club. June 2014. Retrieved 8 September 2015.

Further reading [edit]

• Porteous, Bruce T.; Pradip Tapadar (December 2005). Economic Capital and Financial Risk Management for Financial Services Firms and Conglomerates. Palgrave Macmillan. ISBN1-4039-3608-0.

External links [edit]

• The role of the Financial Services Sector in Expanding Economic Opportunity | A report by Christopher Northward. Sutton and Beth Jenkins | John F. Kennedy School of Government | Harvard Academy

Source: https://en.wikipedia.org/wiki/Financial_services

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