Financial services is a diverse industry that includes banks, brokers and mortgage lenders. It also involves insurance companies, securities traders, investors and financial advisors.
The primary activity of financial services is enabling the consumers to buy different types of products and services by using credit facilities which are available at reasonable rates. It also contributes to the promotion of domestic and foreign trade. This leads to a growth in the economy.
Investing in the right things helps to grow the country’s economy. It promotes production and employment in the country as well as increase in prices, demand and exports of goods.
Banks and financial institutions channel cash from savers to borrowers and redistribute risk. This is done in order to create value for both parties involved. It is an important aspect of the intermediation process, and it can be a major source of income for providers.
Investment firms and other intermediaries provide finance to entrepreneurs in exchange for ownership stakes or profit participation. These entities include private equity funds, venture capital providers, and angel investors.
Regulation of the Financial services sector is crucial in ensuring transparency and upholding fairness for all stakeholders. It is the responsibility of independent agencies such as the Financial Industry Regulatory Authority (FINRA) and the Office of the Comptroller of the Currency to oversee various financial institutions’ operations, uphold consumer protection and safeguard the interests of investors.
The emergence of new digital financial services has made it possible for more people around the world to gain access to accounts and other forms of formal financial services. This includes millions of formerly underserved poor customers who now have access to a range of services including credit, money transfers and loans through mobile phones or other technologies.
