Financial Services

Financial services are activities that support the economy by providing investment and savings channels for individuals, businesses, and governments. This sector includes banks, credit unions, credit-card companies, insurance agencies, stock exchanges, and asset management firms. It promotes economic growth by encouraging investment and savings, and it drives national economies by enabling the flow of capital and liquidity and managing risk.

Without financial services, people with money to spend would have trouble finding those who want to borrow it, and those without spending power would be so intent on saving to cover their losses from business fluctuations or natural calamities that they would not consume many goods and services. These financial institutions provide a safe way to store, grow, and use savings, as well as offer loans for consumption and expansion.

Among the most vital of these are the deposit-taking institutions (banks) that collect money from savers, pool it, and then lend it to individuals or businesses that need it. They also provide credit-card facilities, issue checks (certified or cashier’s), and operate as brokers on stock, bond, and commodity exchanges.

Other players in this industry include securities firms that sell stocks, bonds, and other investments; consumer finance companies that provide mortgages, car loans, and credit cards; and investment-banking companies that underwrite debt or equity for mergers and acquisitions. Large technology companies are moving into the financial services sector as well, offering new digital payment methods like Apple Pay and Amazon Pay in stores, which save merchants from paying credit card networks interchange fees.

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