The Financial Services Industry
Having a strong financial services industry improves consumer confidence and helps to boost the purchasing power of the population. It also helps to ensure that the economy is growing at a balanced rate.
Financial services include banking, insurance, and investment products. These industries are vital to the functioning of an economy. They enable producers to raise capital and distribute it in a fair manner. They also provide the public with advice on saving money. They protect against large unforeseen expenses and provide a safety net.
Financial services providers also provide advice on how to buy and sell securities. They are also responsible for managing assets for individual clients. They can also help reduce risk for borrowers. They may also facilitate the transfer of funds.
The industry also includes payment system providers, such as Mastercard and Visa. These companies accept funds and provide credit cards to consumers. Some of these companies are also nonprofits.
Typically, banks are divided into investment banks and retail banks. Investment banks are responsible for raising money for companies. They also help firms raise funds by selling bonds. They also earn revenue from interest rates and fees. They can also acquire an insurance company.
Other types of financial services include structured finance, which develops complex products for high-net-worth individuals. They also provide advice on mergers and acquisitions. They also provide loans, such as hire-purchase finance and mutual funds.
Financial services have become more regulated over the years. The UK regulators are independent bodies that ensure that consumers are treated fairly.