The Significance Of Financial Services Companies In Society
Financial services companies offer their expertise to deal with all kinds of people. Some seek their help for the betterment of their careers, while some seek it for the betterment of their finances. Whatever be the reason, one thing is for sure that the financial services sector of the economy is a huge money maker. It is also one sector that constantly needs manpower. Let us see what are the different types of financial services company.
Banks: This is perhaps one of the oldest and largest financial services companies in America. They provide a whole range of financial products like savings accounts, loans, mortgages, etc. Most of the big banks in America were started by Europeans or Americans during the colonial period. The financial sector of America has also developed a lot after the English settlement. Nowadays, almost all of the American banks have branches in most major cities in America.
Savings Accounts: A savings account is an ideal way to save for the long term as well as short term requirements. This is perhaps the best thing you can do with your money. Most of the big banks in America offer a variety of savings options like checking, direct deposit, and so on. You can find these financial services companies that offer different types of accounts to suit your budget and needs. They also offer various interest rates and terms.
Insurance Companies: These financial services companies provide life, health, and automobile insurance. They also cover mortgage insurance. In addition, they also offer other insurance related products. Usually, these insurance companies are under the major banks or finance companies.
Digital Waves : These are very much similar to investment funds but are managed by a professional manager. They offer higher returns than investment funds. Also, they can be easily accessed by investors from any part of the world. In this regard, there is hardly any difference between the mutual fund and the private investment fund.
Retail Banking: This is the name given to the commercial banking business in America. Mostly, people use the term interchangeably with ATM (automated teller machine) banking. However, they are slightly different. ATM banking refers to traditional, brick and mortar, real banks that offer direct access to their machines for depositing cash and receiving a withdrawal while retail banking refers to online banking through email, internet or mobile phone.
Venture Capital: Venture capital is also known as a business investment. It is a form of capital that a private investor makes into a business enterprise. Digital Waves are usually financed using some form of credit. Venture capitalists usually prefer to provide growth capital, early-stage financing or new business loans. They are usually the ones to take care of the risk of failed business ventures.
Insurance Companies: Financial services companies like insurance companies are primarily engaged in providing insurance services to customers. However, they also undertake other kinds of insurance works such as life insurance, property insurance, automobile insurance, disability insurance etc. They have to keep up with the latest market trends. There is no doubt that they are one of the largest and most stable markets of financial companies in the world.
Private Equity: The financial services industry also incorporates the concept of private equity. This simply means that a group of investors or groups of people invest in any company. Usually, private equity is used to raise funds for the purpose of expansion or for paying for the acquisition of a particular business. It is also used to shore up the shaky financial market by making financial acquisitions of companies in distress.
Risk Management: Financial services companies undertake a lot of risk. And so they need to ensure that they minimize this risk by developing policies and procedures to deal with it. One such area is risk management. In Digital Waves of stock market, private equity plays a significant role in risk management. As the stock market is highly volatile and stocks tend to fluctuate greatly in a very short period of time, it becomes imperative for financial centres to employ the concept of risk management.
Life Insurance: Last but not the least, health insurance is a product that has been designed for the benefit of the financial services company. A financial services company provides health insurance to its clients on the basis of pre-negotiated premiums. Thus a health insurance policy is designed keeping in mind the specific needs of a financial services company. The main products that are offered by health insurance companies to include long term care insurance, disability income protection, critical illness cover, disability insurance, vision insurance, mortgage life insurance, health maintenance organizations, disability income guarantee, senior citizen health insurance, and prescription drug coverage.
