The three primary categories of financial services are as follows:
Banking Services: This category encompasses a wide range of services provided by banks and credit unions. It includes traditional banking activities such as accepting deposits, providing checking and savings accounts, offering loans and mortgages, issuing credit cards, and facilitating electronic fund transfers. Banks also provide services like ATM access, currency exchange, and safe deposit boxes.
Investment Services: Investment services involve activities related to investing and managing financial assets. This category includes services provided by investment banks, asset management firms, brokerage firms, and financial advisors. Investment services include advising clients on investment opportunities, managing investment portfolios, facilitating stock and bond trading, offering mutual funds and exchange-traded funds (ETFs), and providing research and analysis on financial markets.
Insurance Services: Insurance services involve providing coverage against potential financial losses and risks. Insurance companies offer a range of insurance products to individuals and businesses. This category includes life insurance, health insurance, property and casualty insurance, automobile insurance, liability insurance, and specialized insurance products such as disability insurance, long-term care insurance, and professional liability insurance. Insurance services aim to protect individuals and businesses from financial setbacks caused by unforeseen events or circumstances.
These three categories of financial services work together to meet the various financial needs of individuals, businesses, and governments. They play a crucial role in facilitating economic activities, managing risks, and providing financial security for individuals and organizations.