When most people hear the term financial services sector, the first thing they’re likely to think of is the hustle and bustle of Wall Street. However, there’s more to the industry than just stock trading and investment services.
In fact, the financial services sector includes a broad array of different types of financial services companies. What’s more, financial services companies are considered to be one of the most important parts of the economy in many different countries.
Two simultaneous trends currently characterize the financial services industry. One is specialization, where companies provide targeted services to customers. The other is globalization, or the expansion of firms into developing countries and emerging market nations.
This article looks at some big names in the financial services sector.
- Berkshire Hathaway was formed in 1839 and its stock is one of the most expensive in the world.
- American Express focuses on credit card offerings, co-branded cards with hotels, and other travel services like traveler’s checks.
- Wells Fargo is one of the largest U.S. banks by market capitalization and is among the largest 100 corporations in the United States.
- Charles Schwab led the charge for discount brokerage firms and empowered individual investors.
- Financial services companies facilitate banking, investing, credit card transactions, loans, and more.
Watch Now: The Financial Services Sector Explained
Types of Financial Services Companies
Companies in this sector include:
- Investment banking firms
- Money managers
- Brokerage houses
- Insurance companies
- Tax and accounting firms
- Credit card companies
- Payment processing companies
- Real estate companies
- Fintech companies
Financial services firms serve retail and commercial consumers alike. Companies such as Apple and Amazon can be considered to offer financial services, with the Apple Card and Amazon Pay.
The global financial services market is expected to reach $26.5 trillion by 2022.
Major Names in Financial Services
- Founded: 1839 (as Valley Falls Company)
- Headquarters: Omaha, Nebraska
- Chief Executive Officer: Warren Buffett
- Market Capitalization (as of August 2022): $645.66 billion
Many people have heard of Berkshire Hathaway (BRK-A), the company headed by Warren Buffett, one of the world’s richest individuals. The company’s stock is one of the most expensive in the world and trades on the New York Stock Exchange (NYSE).
Berkshire Hathaway was founded in 1839 as the Valley Falls Company in Rhode Island and was originally a textile manufacturing company. Buffett’s involvement began in 1962 when he started buying shares in the company before assuming full control a few years later.
Berkshire Hathaway has an established record of financial success with companies that it has acquired over the years. The multinational conglomerate owns insurance companies GEICO, National Indemnity, and General Re. The assets of these three companies combined make parent Berkshire Hathaway one of the biggest insurance companies in the U.S.
Berkshire Hathaway has expanded its holdings to include companies involved in real estate, transportation, the furniture industry, and several jewelry companies—notably Helzberg Diamonds. This financial services company also diversified into the confectionery, newspaper publishing, retail, and utility industries.
- Founded: 1850
- Headquarters: New York, New York
- Chief Executive Officer: Stephen Squeri
- Market Capitalization (as of August 2022): $118.97 billion
American Express (AXP) is one of the oldest financial firms in America, dating back to 1850. Originally, it offered freight forwarding services. Subsequently, it began providing travel services. It became one of the first companies in the world to offer charge cards and is commonly recognized by its signature gladiator logo adopted in 1958. Today, American Express, or Amex as it’s more commonly known, is a Fortune 100 company and a component of the Dow Jones Industrial Average (DJIA).
American Express continues to prosper despite competition from major rivals Visa and MasterCard, which have more aggressive credit card marketing strategies. The company has focused its attention on its credit card offerings, creating a number of co-branded cards with hotels. It provides other travel services such as traveler’s checks and has ventured into the prepaid card business. The elite status of American Express is demonstrated by its ability to offer a premium Centurion card that can be had for a hefty $10,000 initial fee and a $5,000 annual fee.
- Founded: 1852
- Headquarters: San Francisco, California
- Chief Executive Officer: Charles Scharf
- Market Capitalization (as of August 2022): $169.345 billion
Wells Fargo (WFC) is a global bank and financial services company with retail and commercial banking locations across the U.S. It also has a presence in Hong Kong, London, Singapore, and Tokyo. The company is one of the largest banks by market capitalization in the United States and is among the largest 100 corporations in the United States.
Wells Fargo has the distinction of holding the first-ever bank charter issued in the U.S. The company acquired Wachovia Bank in 2008, winning out over one of its major competitors, Citigroup (C).
Despite its success and position within the sector, the company has had its fair share of scandals. One of the most notable involved branches opening 1.5 million checking, savings, and credit card accounts without the consent of customers. This was widely reported in 2016 and, as a result, Wells Fargo was slapped with $185 million in fines.
- Founded: 1971
- Headquarters: Westlake, Texas
- Chief Executive Officer: Walter Bettinger
- Market Capitalization (as of August 2022): $138.40 billion
In 1975, Chuck Schwab helped launch the revolution in discounted brokerage commissions. So welcome was this change by individual investors that, within a decade, his company opened approximately 100 branches, began offering 24-hour quotes and extended customer service hours, and even started researching what would become online services. Schwab became known as America’s Largest Discount Broker.
Bank of America bought Charles Schwab in 1983. Chuck Schwab engineered a buy back in 1987 and then took the company public. Schwab started offering financial services for independent financial advisors as well as financial products such as the Schwab 1000 Fund®, the No-Fee IRA, and Schwab Mutual Fund OneSource® service. Schwab went live with web trading in 1996.
Today, Charles Schwab has $7.3 trillion in client assets, 33.9 million brokerage accounts (and averages 5.22 million daily trades), 1.7 million banking accounts, and serves approximately 15,000 independent advisor firms. It employs 35,200.
- Founded: 1998
- Headquarters: San Jose, California
- Chief Executive Officer: Dan Schulman
- Market Capitalization (as of August 2022): $108.99 billion
PayPal is one of the first fintech companies. It remains a groundbreaking member of the vanguard of the digital payment transformation. Founded in 1998, its strictly online platform lets individuals and businesses make secure financial transactions through its payment portal. It has 429 million active consumer and merchant accounts and enabled 5.5 billion payment transactions as of Q2 2022.
PayPal has struck many strategic partnerships with important financial services companies, including Visa, Bank of America, Banorte, Barclays, Citi, HSBC, JPMorgan Chase, ShinhanCard, Wells Fargo, American Express, Discover, Mastercard, FIS, Paymentus and Synchrony.
In 2019, PayPal become the first payment services company approved for online payment services in China. It continues to expand its payment services platform worldwide. In 2021, PayPal introduced Checkout with Crypto to ensure safe payments using cryptocurrencies.
- Founded: 1869
- Headquarters: New York, New York
- Chief Executive Officer: David Solomon
- Market Capitalization (as of August 2022): $116.32 billion
Goldman Sachs Group, Inc. is a global financial institution. With a goal to support sustainable economic growth and financial opportunity, it offers financial services related to investment banking, securities, investment management, and consumer banking. Its clientele is a large and diversified group that includes individuals, corporations, other financial institutions, and governments.
Goldman Sachs delivers advice and services that assist organizations with mergers and acquisitions, financing, and other transactions. Its investment research offers choice insights and analysis for clients in the equity, fixed income, currency, and commodities markets. In addition, it provides investment management solutions for wealth building that involves all major asset classes.
Goldman Sachs partnered with Apple to issue the Apple Card. The firm, along with the Apple Card, was ranked number one in customer satisfaction by the J.D. Power 2022 U.S. Credit Card Satisfaction Study.
- Founded: 1985
- Headquarters: Detroit, Michigan
- Chief Executive Officer: Jay Farner
- Market Capitalization (as of August 2022): $16.99 billion (Market capitalization for Rocket Companies, of which Rocket Mortgage is the flagship business.)
Rocket Mortgage is the self-proclaimed biggest mortgage lender in the U.S. Formerly known as Quicken Loans, it changed its name to Rocket Mortgage in 2021 to reflect its focus on helping people obtain mortgages more easily with a digital platform and innovative technology.
Rocket Mortgage introduced online mortgage lending. It offers an online application process, personalized closing time and location, 24/7 loan tracking, and award-winning customer service. In 2017, it became the largest residential mortgage lender in the U.S., beating out 30,000 others for the top spot.
In August 2022, it partnered with Q2 Holdings, a financial services firm offering digital transformation solutions for banking and lending, to provide its digital home loan application and live mortgage assistance inside of Q2’s online banking platform.
What Are Some Examples of Financial Services?
There are a variety of financial services offered by companies in the financial services sector around the world. These services involve banking, brokerage, mortgages, credit cards, payment services, real estate, taxes and accounting, and investment funds.
What Is the Biggest Financial Services Company?
Market capitalizations change all the time and, as a result, so do rankings. However, with a recent market capitalization of $430.20 billion, Visa tops the list of the worlds biggest financial services companies.
What Is the Largest U.S. Bank by Market Capitalization?
Based on a recent market capitalization of $338.47 billion, JP Morgan is the largest U.S. bank.
The Bottom Line
The financial services industry plays a crucial role in supporting healthy economies in many countries. The sector includes a range of companies that provide many kinds of financial services to both individuals and businesses.
Facilitating the flow of capital across the globe, the financial services sector is an essential part of everyday life in our modern, interconnected world.