The financial services are a broad category of industries that include banks, credit unions, credit-card companies and credit-reporting agencies. They help individuals and businesses with a variety of tasks, including investing money, lending money and providing financial advice. Financial services also include insurance and asset management. The industry is regulated by many independent agencies.
The main function of financial services is to create and deliver the products according to the demand of customers. It also helps in attracting the investments from different sources. These services can be classified as wholesale and retail financial services. This industry sector has been expanding due to the increasing number of financial institutions.
These financial services are the backbone of economic development as they provide help to both individuals and business. It helps the individual in saving, purchasing and investment while it provides support to the business in expansion and production.
Besides these, these financial services also offer various other facilities like hire purchase, housing finance etc. This increases the demand for consumer goods. This in turn encourages the producer to invest more. The financial services also act as intermediaries to change savings into investment.
It is also important to note that the financial services have been playing a vital role in reducing poverty in societies as they help individuals in saving, purchasing and getting protection against some causalities while it encourages them to invest more for the betterment of society. It also gives confidence in the system and reduces the breaching of laws.