The financial services industry encompasses many different types of firms that offer products and services designed to meet the investment, savings, and protection needs of individuals and businesses. These firms include banks; credit unions and other community-based financial institutions; stock brokerage firms; mutual funds companies; mortgage bankers and real estate agencies; and insurance companies.

It wasn’t long ago that the lines that separated the different sectors of the financial services industry were quite clear. Banks offered checking and savings accounts, loan associations provided mortgages and personal loans, and brokerage companies specialized in offering investments like stocks and mutual funds.

As competition intensified and consumers demanded a greater variety of products and services, the lines that separated these sectors began to blur. The Gramm-Leach-Bliley Act of the 1990s in the United States, for example, repealed Glass-Steagall and allowed a single bank to offer investment, commercial, and consumer banking. Increasing consolidation and regulatory changes have further eroded these distinctions.

Today, some of these companies are massive conglomerates that offer almost all the products and services a consumer could want. For example, some large banks now offer everything from investment and commercial banking to retirement planning and home financing.

In addition, there are a number of smaller, specialty financial service providers. These include: Private banking – A firm that provides high net worth individuals with a range of exclusive banking services. Currency exchange services – A business that provides clients with the opportunity to purchase or sell foreign currency.