A:

It's difficult to know the precise size of the global financial services sector. The World Bank only collects data from 142 countries – it estimates the rest – and hasn't compiled new statistics since 2010. Moreover, the definition and scope of industries that fall within the financial services sector is not consistent among data sources. The Organization for Economic Co-operation and Development (OECD) suggests that financial services typically make up 20-30% of total service market revenue and about 20% of the total gross domestic product in developed economies.

The most recent notable attempt at compiling earnings estimates for the global financial services sector was made by the McKinsey Global Institute in 2011. Its figures center around retail banking, life insurance, and property and casual insurance. According to the McKinsey Global Institute report on consumer financial services, these three service areas generate approximately $6.6 trillion in annual revenue and has tended to grow at a 6% compound annual rate over the preceding decade.

The McKinsey Global Institute also suggested that retail banking, life insurance, and property and causality insurance make up approximately 60% of total financial services sector sales. It can be extrapolated from that estimate that the total revenue of the global financial services sector in 2011 was roughly $11 trillion.

To figure out what percentage of the global economy that $11 trillion represents, a total estimate of global GDP is required. The International Monetary Fund (IMF) estimated that the total global economy was worth $77.6 trillion in 2014. If global financial services kept up its 6% growth rate for the years between 2012-2014, then its 2014 figure would be $13.1 trillion.

Using these 2014 figures and calculations, the financial services sector comprises about 16.9% of the global economy, as measured in GDP. Further data from the IMF shows that the total service economy makes up about 60-65% of total global revenue. If the OECD's suggestion that financial services are between 20% and 30% of the total service market, then financial services would comprise between 12% and 19.5% of the total global economy.,

RELATED FAQS
  1. What is the financial services sector?

    The financial services sector consists of a diverse group of companies that goes beyond banks and credit unions. Read Answer >>
  2. What countries represent the largest portion of the global banking sector?

    Learn how four countries, China, the U.K., France and the U.S., exhibit the greatest influence over the global banking sector, ... Read Answer >>
  3. How do externalities affect equilibrium and create market failure?

    Learn about the responsibilities of the International Monetary Fund and its functions regarding the international monetary ... Read Answer >>
  4. What is the average range of profit margin for a company in the financial services ...

    Learn why a company's profit margin is important in analyzing its worth and how companies within the financial services sector ... Read Answer >>
  5. What is GDP and Why Is It So Important To Investors?

    The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. What does ... Read Answer >>
  6. What country spends the most on education?

    Learn about the amounts that various developed nations spend on educating their young people compared to education spending ... Read Answer >>
Related Articles
  1. Personal Finance

    How the Financial Services Sector Differs From Banks

    Learn about the difference between the banking industry and the financial services sector and how to distinguish financial goods from financial services.
  2. Financial Advisor

    Citigroup Cuts U.S. Growth Forecast

    After the recently published IMF forecast report, major banks like Citigroup are also cutting growth projections for the U.S. Here's why.
  3. Insights

    An Introduction To The International Monetary Fund (IMF)

    Chances are you've heard of the IMF. But what does it do, and why is it so controversial?
  4. Insights

    Can The IMF Solve Global Economic Problems?

    The IMF is an important tool to help struggling countries, but it's not without its problems.
  5. Financial Advisor

    These Will Be the World's Top Economies in 2020

    Discover the current economic forces that are anticipated to significantly shift the landscape of the world's most powerful economies over the next decade.
  6. Insights

    A Look At China's Growing Influence On The World

    With the second-largest economy in the world, China has significant (and growing) influence on the global economy. But how is that impact figured?
  7. Personal Finance

    What Is the Bank for International Settlements?

    Get the scoop on the structure and functions of the oldest global financial institution.
  8. Personal Finance

    The Top 3 Educational Systems In The World

    Prospering economies and financial sectors benefit from highly evolved teaching systems. Find out how.
  9. Insights

    How Productivity And Globalization Affect The Economy

    The systems designed to track the national economy is flawed. Discover the impacts of globalization.
  10. Investing

    Impact of the Chinese Economy on the U.S. Economy

    The economic growth of China has been decreasing since 2010. What impact does this have on the US and the world economy?
RELATED TERMS
  1. Financial Sector

    The financial sector is a category comprising companies that ...
  2. Services Sector ETF

    The services sector ETF is an exchange-traded fund (ETF) that ...
  3. Financial Institution - FI

    A financial institution is a company that focuses on dealing ...
  4. Global Recession

    A global recession is an extended period of economic decline ...
  5. Advanced Economies

    Advanced economies, as described by the International Monetary ...
  6. Sector Fund

    A sector fund is a fund that invests solely in businesses that ...
Hot Definitions
  1. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  2. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  3. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  4. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  5. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  6. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
Trading Center