What Is and Isn’t Financial Services?

Financial services encompass everything that has to do with money and how people spend it, invest it or save it. The industry includes banks, credit unions and credit-card companies as well as mortgage lenders, securities brokers, Wall Street investors and more. The sector is also responsible for providing small businesses, large corporations and nonprofits with the financial tools they need.

Despite the broad scope of the industry, there are some important distinctions to keep in mind when it comes to defining what is and isn’t part of financial services. One of the most obvious is that while a financial good like an insurance policy is a form of financial service (it protects you financially if something goes wrong), there are other types of financial services that don’t involve the sale of tangible goods. These include debt resolution services (a company that negotiates with creditors to allow you to pay less than what you owe), brokerage services (buying and selling stock or other assets) and financial advisory services.

There are also different kinds of financial services companies, including conglomerates and pure plays. Conglomerates are for-profit financial services companies that operate in multiple sectors of the industry, while pure plays are focused on a single segment. Some examples of financial services firms that fall into both categories are American Express, which focuses on credit cards and co-branded partnerships with hotels, and Apple, which offers the Apple Card, a way to make in-store payments at the point of sale while saving merchants’ interchange fees.