Financial services are a vital part of any economy, as they advance loans for businesses to expand, grant mortgages for people to purchase homes, and help build savings for retirement. In many developed countries, the health of a financial sector can be a good indicator for overall economic health. The financial sector also helps to provide insurance policies that protect individuals and business from risk, as well as offering opportunities for investors to gain ownership in companies through equity investments.
There are several different types of financial services, and the sector is constantly changing as technology evolves. For example, new digital payment methods are emerging, such as Apple Card and Amazon Pay, which could threaten traditional bank revenue streams. In addition, fintech startups are leveraging technology to provide more affordable and convenient financial services.
The financial services industry also includes independent regulatory agencies that oversee different financial institutions and make sure they’re operating fairly. Some examples are the Financial Industry Regulatory Authority and the Office of the Comptroller of the Currency.
Financial services have pervasive effects on the lives of citizens and have an impact on all socio-economic indicators. Effective financial services are good for citizens, the society and governments. However, there are various circumstances that keep people out of the net of financial services. This gap can be bridged by business, civil societies and the government through innovative approaches.