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Financial Services

Financial services

 
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises.
 
Banks
 
A "commercial bank" is what is commonly referred to as simply a "bank". The term "commercial" is used to distinguish it from an "investment bank," a type of financial services entity which, instead of lending money directly to a business, helps businesses raise money from other firms in the form of bonds (debt) or stock (equity).
 
Banking services
 
The primary operations of banks include:
 
  • Keeping money safe while also allowing withdrawals when needed
  • Issuance of chequebooks so that bills can be paid and other kinds of payments can be delivered by post
  • Provide personal loans, commercial loans, and mortgage loans (typically loans to purchase a home, property 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 direct debits, so payments for bills can be made automatically
  • Provide overdraft agreements for the temporary advancement of the Bank's own money to meet monthly spending commitments of a customer in their current account.
  • Provide Charge card advances of the Bank's own money for customers wishing to settle credit advances monthly.
  • Provide a cheque guaranteed by the Bank itself and prepaid by the customer, such as a cashier's cheque or certified cheque.
  • Notary service for financial and other documents.
 
Other types of bank services
 
  • Private banking - Private banks provide banking services exclusively to high net worth individuals. Many financial services firms require a person or family to have a certain minimum net worth to qualify for private banking services. Private banks often provide more personal services, such as wealth management and tax planning, than normal retail banks.
  • Capital market bank - bank that underwrite debt and equity, assist company deals (advisory services, underwriting and advisory fees), and restructure debt into structured finance products.
  • Bank cards - include both credit cards and debit cards. Bank Of America is the largest issuer of bank cards.
  • Credit card machine services and networks - Companies which provide credit card machine and payment networks call themselves "merchant card providers".
 
 
Other financial services
 
Intermediation or advisory services - These services involve stock brokers (private client services) and discount brokers. Stock brokers assist investors in buying or selling shares. Primarily internet-based companies are often referred to as discount brokerages, although many now have branch offices to assist clients. These brokerages primarily target individual investors. Full service and private client firms primarily assist and execute trades for clients with large amounts of capital to invest, such as large companies, wealthy individuals, and investment management funds.
 
Private equity - Private equity funds are typically closed-end funds, which usually take controlling 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 most successful private equity funds can generate returns significantly higher than provided by the equity markets.
Venture capital is a type of private equity capital typically provided by professional, outside investors to new, high-potential-growth companies in the interest of taking the company to an IPO or trade sale of the business.
 
Angel investment - An angel investor or angel (known as a business angel or informal investor in Europe), is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital.
 
Conglomerates - A financial services conglomerate is a financial services firm that is active in more than one sector of the financial services market e.g. life insurance, general insurance, health insurance, asset management, retail banking, wholesale banking, investment banking, etc. A key rationale for the existence of such businesses is the existence of diversification benefits that are present when different types of businesses are aggregated i.e. bad things don't always happen at the same time. As a consequence, economic capital for a conglomerate is usually substantially less than economic capital is for the sum of its parts.
 
Debt resolution is a consumer service that assists individuals that have too much debt to pay off as requested, but do not want to file bankruptcy and wish to payoff their debts owed. This debt can be accrued in various ways including but not limited to personal loans, credit cards or in some cases merchant accounts. There are many services/companies that can assist with this. These can include debt consolidation, debt settlement and refinancing.