Financial services
Financial services are economic services tied to finance provided by financial institutions. Financial services encompass a broad range of service sector activities, especially as concerns financial management and consumer finance.
For the Hong Kong constituency, see Financial Services (constituency).
The finance industry in its most common sense concerns commercial banks that provide market liquidity, risk instruments, and brokerage for large public companies and multinational corporations at a macroeconomic scale that impacts domestic politics and foreign relations. The extragovernmental clout and scale of the finance industry remains an ongoing controversy in many industrialized Western economies, as seen in the American Occupy Wall Street civil protest movement of 2011.
Styles of financial institution include credit union, bank, savings and loan association, trust company, building society, brokerage firm, payment processor, many types of broker, and some government-sponsored enterprise.[1]
Financial services include accountancy, investment banking, investment management, and personal asset management.
Financial products include insurance, credit cards, mortgage loans, and pension funds.
FX or Foreign exchange services are provided by many banks and specialists foreign exchange brokers around the world. Foreign exchange services include:
London handled 36.7% of global currency transactions in 2009 – an average daily turnover of US$1.85 trillion – with more US dollars traded in London than New York, and more Euros traded than in every other city in Europe combined.[5][6][7][8][9]
New York City is the largest center of investment services, followed by London.[11]
The United States, followed by Japan and the United Kingdom are the largest insurance markets in the world.[13]
Financial exports[edit]
A financial export is a financial service provided by a domestic firm (regardless of ownership) to a foreign firm or individual. While financial services such as banking, insurance, and investment management are often seen as domestic services, an increasing proportion of financial services are now being handled abroad, in other financial centres, for a variety 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 as offshore financial centres. The increasing competitiveness of financial services has meant that some countries, such as Japan, which were once 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.[14] The UK's position is helped by both unique institutions (such as Lloyd's of London for insurance, the Baltic Exchange for shipping etc.)[15] and an environment that attracts foreign firms;[16] many international corporations have global or regional headquarters in the London and are listed on the London Stock Exchange, and many banks and other financial institutions operate there or in Edinburgh.[17][18]