Financial Services Firms: The Big Picture

Any firm that provides financial products and services to individuals or other firms can be categorized as a financial services firm. We would categorize financial services businesses into four groups from the perspective of how they make their money. A bank makes money on the spread between the interest it pays to those from whom it raises funds and the interest it charges those who borrow from it. It also makes money from other services it offers its depositors and lenders. Insurance companies make their income in two ways. One is through the premiums they receive from those who buy insurance protection from them. The other is income from the investment portfolios they maintain to service the claims. ...

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