Unit 1, Lesson 2 Financial Services Industry

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Unit 1, Lesson 2Financial Services Industry
AOFPrinciples of Finance
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What do we mean by financial services?

• The term financial services refers to
• Institutions that deal with the management of
  money
• The services that these institutions provide
• The financial services industry helps
  individuals, businesses, and governments all
  manage their money.

In what ways does the financial services industry
help people manage their money?
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What institutions provide these services?

• The most common institutions that provide
  financial services include
• Banks
• Credit unions
• Savings and loans
• Insurance companies
• Other types include advisory services, credit
  card companies, investment banks, stock
  brokerages, and many more!

What financial services have you utilized?
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Many different financial services are available

• A wide variety of financial services are offered.
  Some of the most common include
• Checking and savings accounts
• ATM and debit cards
• Money market accounts
• Certificates of deposit
• Loans (home, auto, business)
• Credit cards
• Mutual funds and other securities

What information would you want to know before
you opened a checking account?
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Banks match borrowers and lenders

• Banks typically fall into two categories. The
  most common are commercial and investment banks.
• Banks provide many different services to their
  customers. The most common are
• Depository services
• Lending services

Can you name any of the banks in your area?
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Thrifts and credit unions Whats the difference?

• Aside from banks, some of the other more common
  financial institutions include
• Savings and loans/thrifts
• Credit unions
• Insurance companies
• Each started as meeting the needs of services
  that were not covered by commercial banks.

Why would you choose a credit union or a savings
and loan over a bank?
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Insurance Protect yourself!

• Insurance protects you from unexpected losses
• Insurance doesnt protect you from the risk
  itself, but provides you with financial coverage
  should the loss occur
• These services cover a number of risks that are
  most commonly related to an individuals life and
  property
• Some insurance companies even offer typical
  banking services like mortgage and auto loan
  needs

What types of insurance do you think are the most
important to have?
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Financial services and society
The financial services industry is critical to
the overall health of our economy because it

• Channels financial resources to their most
  productive uses
• Increases individual wealth
• Promotes saving
• Attracts the financial resources that promote
  lending

In what ways can the health of the financial
services industry reflect an individuals
financial health?