The financial markets of the United States are the largest in the world. They also have the most liquidity. Insurance and finance represented $1.5 trillion, or 7.4% of the GDP for the country in 2018. It is a sector that helps to finance and facilitate the export of manufactured goods and agricultural products.
The U.S. exported $114.5 billion in financial services and insurance products in 2017. This action led to a $40.8 billion trade surplus in these areas. If re-insurance was excluded from those figures, then the surplus would rise to $69.6 billion. Over 6.3 million people have employment opportunities because of the actions of this industry.
Almost 30 financial services companies from Fortune’s Global 500 listing decided to locate their headquarters in the United States to take advantage of the competitive and comprehensive finance industry. It is a sector that allows the widest range of products and instruments that let consumers manage risks, create wealth, and meet their overall financial needs.
Important Finance Industry Statistics
#1. The banking system in the United States currently manages $17.9 trillion in assets. This activity led to a net income in 2018 of $236.9 billion. This sector supports the largest economy in the world with the widest range of diversity in institutions and private credit concentration. (SelectUSA)
#2. The total amount of retirement assets in the United States reached $28.2 trillion in 2017. When insurance assets and mutual funds are included with that figure, asset managers had almost $51 trillion in conventional assets under their control. That represents about 47% of the global total for these funds. (SelectUSA)
#3. The insurance industry net premiums written in 2016 totaled $1.1 trillion. Premiums recorded by health and life insurers represented 53% of this market, with property and casualty representing the remainder. (SelectUSA)
#4. Over 30% of re-insurance purchased around the world comes from firms located in the United States. (SelectUSA)
#5. $84 billion of investments happened in 2017 through venture capitalism in the United States. Over 8,000 deals went through during the year, which was the highest amount since the early 2000s. It also represents a 16% increase from 2016 numbers. (SelectUSA0
#6. American private equity firms invested over $500 billion in U.S.-based companies during 2017, with over 4,700 investment agencies active in this sector. About 11.3 million people receive employment in the U.S. from these actions, which another 8.3 million positions created globally. (SelectUSA)
#7. The average age of an employee working in the finance industry is 42.9. Men earn an average salary of $117,000 in this sector, but women are only earning $61,870 per year. (DataUSA)
#8. The top three occupations found in the finance industry today are financial managers, insurance sales agencies, and policy processing clerks. If working full-time, then these workers are putting in 43.4 hours per week. Part-time employees work 22.8 hours weekly. (DataUSA)
#9. The number of available positions in the finance industry grew by 2.5% in 2016, with the largest share of positions held by financial managers (10.2%). (DataUSA)
#10. The top 1,000 world banks reached an asset level of $124 trillion in 2018, with a return on assets at 0.9%. Tier 1 capital ratio as a proportion to assets rose to 6.7%, which is significantly higher than 2008 figures. (Deloitte)
#11. The Tier 1 capital ratio in the United States stands at 13.14%, with a return on equity for the industry at a post-recession high of 11.83% as of 2018. (Deloitte)
#12. The growth of Chinese banks over the past ten years has surpassed the European Union in terms of size. The world’s four largest banks are all located in China, whereas in 2007, none of the institutions in the top 10 were located in the country. Some of these firms reported a 15.3% return on equity in 2017. (Deloitte)
#13. Only 22% of financial institutions have fully deployed a platform-driven architecture through open interfaces and/or APIs. 30% have deployed data lakes and big data platforms, but only 18% are using containers, serverless computing, and microservices. (Deloitte)
#14. 22% of the finance industry says that they are currently using chatbots, artificial intelligence, and machine learning technologies to improve their services. 36% are trialing these systems, while 26% say that there are plans in the works to offer them. (Deloitte)
#15. 28% of financial institutions say that they play to use new technologies to create digital capabilities. 23% report that they need to modernize their legacy systems, while 18% say that their top priority is to manage security, privacy, and identity concerns. (Deloitte)
#16. Digital transformations have led to an increased level of competition from tech startups in the finance industry. It has also led to a consolidation of startups and smaller banks. Fintech funding reached $32.6 billion by the end of the third quarter in 2018, reflecting an 82% increase from the year before. (Business Insider)
#17. 89% of respondents to a survey regarding banking and finance features said that they use mobile banking services in 2018. That is six percentage points higher than the number of people who reported the same activity in 2017. (Business Insider)
#18. 97% of Millennials use mobile banking to take care of their financial needs, whereas only 79% of Baby Boomers are using this option to manage their accounts. (Business Insider)
#19. 64% of mobile banking users say that they research an institution’s mobile capabilities before deciding to open an account, and 61% say that they would change their provider if the business offered a poor mobile experience. (Business Insider)
#20. The last time that interest rates were at or near current levels, which was the 1950s, Treasury Bonds lost 40% of their inflation-adjusted value over the following 30 years. (Deutsche Bank)
#21. In an August 2000 article that listed ten stocks that would last the decade, it only took that specific portfolio two years to lose 74% of its value. (Fortune)
#22. 40% of stocks have lost at least 70% of their value since 1980, which means it suffered a catastrophic event from which they were never able to recover. (Financially Simple)
#23. 21% of Americans are still carrying a mortgage at the age of 75 even though most people expect to have this debt cleared off of their accounts by then. (Financially Simple)
#24. Out of all of the mutual funds benchmarked to the S&P 500, 72% of them underperformed the index between 1990-2010. (Vanguard)
#25. 53% of American workers have saved less than $25,000 for their retirement when excluding the value of their homes. 35% of these employees have saved less than $1,000 for their future. (Financially Simple)
#26. 61% of parents say that they prefer discussing financial investments with an advisor other than their adult children. Despite this preference, hedge-fund managers underperformed consistently over the past ten years even though stocks have risen 1,100-fold over the last 70 years. (Financially Simple)
#27. Most active traders in the finance industry create the lowest returns. From 1992-2006, 80% of active traders lost money, while 19% described their activities as being cost-neutral. Only 1% experienced profitable returns. (Financially Simple)
#28. Two-thirds of people in the 18-29 age demographic say that investing in the stock market is a scary or intimidating process. 57% of those over the age of 55 say the same thing. (Forbes)
#29. Only 22% of Millennials have a taxable investment account. Baby Boomers clock in at 39% for this statistic, while the Silent Generation is at 53%. (Liberated Stock Trader)
#30. 52% of people between the ages of 21-36 report that they’re keeping all of their savings in cash. (Capital.com)
#31. The top 5 stocks that receive interest from Millennials from an investment standpoint are Apple, Amazon, Netflix, Facebook, and Tesla. (Capital.com)
#32. B2B cryptocurrency companies raised about $400 million of initial coin offerings in 2017, while B2D companies brought in $1.2 billion. (Tomasz Tunguz)
#33. 40% of C-level leaders at technology companies say that they intend to roll out blockchain as a viable option in the next three years. IT services and business activities will account for approximately 70% of this spending. (Computer World)
#34. About 5% of Americans are using Bitcoin as a way to diversify their portfolio. 48% of the people who engage with this cryptocurrency are between the ages of 25-34. (Coin Dance)
#35. The legalization of cannabis and marijuana products has led to unique opportunities for the finance industry. It is a market worth $50 billion in the United States, and it might be worth over $80 billion by 2030. (The Motley Fool)
#36. Investors that put in $1,000 for cannabis-related businesses would have seen a 3,500% return if they stayed on from 2016-2019. (The Motley Fool)
#37. There were 125 IPOs filed in 2018, which is a 5.3% increase from the year before. The healthcare sector led the way in this category, responsible for about one-third of the total filings in the industry. (Renaissance Capital)
#38. About $80 billion was raised in IPOs for 2019, which is double the yearly average seen in the market since 1999. (Bloomberg)
#39. Approximately 50% of Americans don’t even understand the basics of the financial market, which makes it next to impossible for them to comprehend how to navigate it so that their money can begin to grow. (Lexington Law)
#40. Over the last 100 years, the stock market in the United States returned an average of 10.2% per year. That means a $1 investment in 1919 would become $17,820 today. (Betterment)
#41. The S&P 500 is made up of 11 sectors, including technology, real estate, material, and energy. Most people believe that tech has performed the best over time, but consumer staples are a better investment. If you invested $1 in 1962 into it, it would have been worth over $1,000 in 2014. (O’Shaughnessy Asset Management)
#42. Since the S&P 500 began, almost 1,000 companies have been removed from the index. That’s how it can average such a high level of return as an index each year. 40% of all stocks have suffered a permanent decline from their peak value since 1980. (Betterment)
#43. If you have $8,000 that you can save per year and 30 years until your retirement, an annual average growth rate of 8% means you could almost be a millionaire when it is time to stop working. (The Motley Fool)
#44. Inflation averages about 3% per year in the American economy, which means $100,000 today will only be worth $54,000 when you fast-forward 20 years into the future. (The Motley Fool)
#45. The capital gains tax rate on short-term investments is the same as your income tax rate. If you hold the asset for more than a year, then the tax rate drops from 28% for higher earners to only 15% on the amount. (The Motley Fool)
#46. 39% of Millennials say that they are saving at least 10% of their salary each year. Most experts recommend that you put away 15% of what you earn to ensure that you can cover emergency costs or manage your retirement. (Forbes)
#47. About 1 in 6 Millennials have saved at least $100,000 so far from their employment activities. (Bank of America)
#48. Millennials hold 25% of their investments in cash, compared to only 19% of overall investors. (Charles Schwab)
#49. 1 in 5 Millennials say that most of their retirement money is in stable investments like money market funds or bunds. Only 15% of the older generations say the same thing. (Transamerica)
Finance Industry Trends and Analysis
Although the World Bank collects data from over 140 different countries, it estimates the information from about 20% of the world. Statistics from the finance industry aren’t compiled regularly either, with the last significant update coming in 2010. Even the scope of the firms which qualify for this sector is not consistent between data sets. These challenges make it problematic to look toward the future.
What we do know is that financial services are usually about 30% of the total service market revenues that come through each year. It is a sector responsible for about one-fifth of the total GDP in a developed economy. That figure should not change in the coming years.
The service economy makes up more than 60% of total global revenue. People are always going to need retail banking services. Various forms of insurance that protect property, life, and casual needs are an essential component of future planning. Unless significant changes to the economy occur in the next decade, what we see today in the finance industry will be what we see in 2030.
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