When financial services are working well, there is more investment and production across all sectors, which leads to economic growth. When they’re not, it can cause a recession. Financial services include credit unions, banks, credit-card companies, insurance agencies, accountancy firms, consumer-finance companies and stock brokerages. The industry is present in all economically developed geographic locations and tends to cluster in local, regional or international financial centers.
As a sector, it is highly competitive and sensitive to political developments. Financial services are regulated by government and independent agencies to ensure that they meet the needs of consumers, maintain transparency and protect their assets. There are a number of specialized sub-industries within financial services that cater to specific sectors. For example, private equity funds and venture capital providers invest in promising small businesses or startups in return for ownership stakes or profit participation. Meanwhile, angel investors are independently wealthy individuals who search for new startup companies to fund.
Technological changes and advancements are driving the financial services industry to innovate and change. The adoption of artificial intelligence (AI) is helping many companies streamline their processes, improve decision-making and enhance the customer experience. For instance, Spar Nord utilised Salesforce Financial Services Cloud Einstein to enable their advisors and agents to make real-time predictions of future outcomes and deliver personalised recommendations to their customers. This has also allowed them to digitalise their slow manual processes and provide answers to customer inquiries faster.