Financial Services

Financial services are a huge and diverse industry, encompassing everything from insurance and money management to payment systems and digital banking technology. The sector includes legacy banks and credit card issuers, venture capital providers, consumer finance companies, mortgage lenders, investment banks and insurance firms. With the coronavirus pandemic driving people to stay at home and boosting e-banking usage, the industry is undergoing a period of disruption that’s seeing banks and challengers alike sharpen their technology and offer more remote services.

Banks provide both financial goods and financial services, such as accepting deposits, issuing credit cards and electronically transferring funds. They also serve as middlemen between savers and borrowers, pooling their funds to lend to those who need the capital to start businesses or purchase homes. Banks make their money by charging fees for these transactions and from interest earned on loans.

A crucial part of financial services is insurance, which protects against both personal and business risk. Insurance covers against unforeseen events such as death, disability, property loss and liability. The industry’s brokers and underwriters also deliver financial services, as they search for the best rates and create policies that meet customers’ needs.

Financial services help individuals invest their savings and acquire more goods and services, increasing consumption and boosting the economy. The services also enable producers to maximize their profits, by helping them get credit at reasonable rates and through hire purchase finance. They also encourage saving by offering a variety of reinvestment options.