Financial Services
Financial services is a broad category of industries and businesses that make, manage, exchange and invest money. These industries encompass banking, investments, insurance and financial analysis.
Banks and other financial institutions collect deposits from people and pool them for lending purposes. They also provide other banking services such as credit cards and other loans.
The financial services sector is dominated by the large commercial banks, community banks, credit unions and other entities. They earn revenue primarily through fees, commissions and the difference between interest rates charged on their deposits and their loans.
In a strong economy, the financial services sector is essential to ensuring that businesses and individuals can get adequate funds for production and to grow their business in the future. Moreover, the presence of these institutions helps to control the liquidity in the market by controlling the amount of money and keeping inflation at bay.
Investment and savings are encouraged by the financial services sector as they help to increase the value of capital and enable companies to reinvest their profits in the business and also earn higher profits. This in turn boosts the development of the economy as well as enables the people to have a better standard of living.
Insurance and risk management are also encouraged by the financial services sector as they offer protection against various kinds of risks which can cause huge losses for both the producer as well as for the investor. This in turn enables the economy to develop as well as improves employment opportunities.
