Financial Services

Financial services became more relevant in the United States partly as a result of the Gramm-Leach-Bliley Act in 1997, which enabled different types of companies operating in the financial services industry at that time to fusionate. Companies usually have two different approaches to this absolutely new type of business. One approach would be a bank which suddenly buys an insurance company or an investment bank, keeps the original brand names of the acquired firm, and adds the acquisition to its holding company simply to diversify the earnings. In other countrys like in Japan, non-financial services companies are permitted within the holding company. In this scenario, each company still looks independent, and has its own customers, etc. In the other style, a bank would simply create its own brokerage division or insurance division and attempt to sell those products to its own existing customers, with incentives for combining all things with one company.