The term financial services institution is defined in Section 1 para. 1a of the German Banking Act (KWG).
Financial services institutions are companies that provide financial services for others as part of their business or to an extent that requires commercially oriented business operations and that are not credit institutions. Section 1 para. 1 sentence 2 KWG contains a list of what constitutes a financial service.
For example, investment broking, contract broking, investment advice and financial portfolio management all constitute financial services. In addition, crypto custody business also constitutes a financial service. Financial services institutions wishing to operate in Germany require a licence. In Germany this licence is issued by the BaFin.