Financial services is a broad sector that impacts everyone in big and small ways. Even though most people think of bankers and hedge fund managers when they hear the word “financial,” the sector also touches small community banks and nonprofits.
The sector provides an important service to a country’s economy, helping to drive the free flow of capital and liquidity in the marketplace. When this sector works well, consumer confidence and purchasing power rise, resulting in a stronger economy.
A major benefit of the presence of financial services is the availability of finance for businesses to grow and make more profits. This is a crucial function of any industry, and without the ability to raise and disburse finance in a timely manner, companies will not be able to meet their production needs.
Banking and insurance are two of the most important sectors in the financial services industry. These sectors enable customers to save money for future use and provide a source of protection against risks.
Banks and insurers are important because they offer a variety of products that can be used at different life stages. For example, a customer may need to borrow money to pay for a wedding or purchase a home. By analyzing their customers’ data, banks can anticipate these moments and prepare offers and products to serve them when they need them most.
The financial services sector is regulated by the government to protect consumers. This includes independent bodies designated to oversee the various operations of financial institutions, uphold transparency and make sure that they are putting the interests of their clients first.