The financial services industry facilitates the flow of capital around the world.
The financial sector, which includes banks, credit unions, insurance companies, investment funds, and other businesses that provide financial services, is a key part of the economy in most countries. It allows people to deposit money for future use, and also helps them borrow when they need it.
A bank is a type of financial service provider that lends money to other firms in the form of loans or shares of stock (equity). It earns revenue from fees, commissions, and interest payments.
Other financial services include mortgages, credit cards, and real estate. These industries, too, are often called “financial services” because they provide many of the same types of goods and services that a traditional bank does.
Investment banking is a different kind of financial service that involves helping businesses raise money by investing in stocks and bonds. This service is provided by a number of different kinds of entities, including large commercial banks and community banks.
In most countries, the financial services sector is supervised by government agencies. These agencies monitor and license financial service providers. Supervision is important because it can prevent financial institutions from doing things that could harm customers or the economy. It also allows supervisors to take over a financial institution when necessary.