The financial services industry is a large sector of the economy that encompasses an array of professional firms that offer business to consumer and business to business finance management services. These services range from investment banking, credit and risk management to insurance, payments, and digital money management. Virtually everyone uses these services at one time or another, and many people rely on these industries for their own personal finances as well as their own businesses’ business purposes. These markets are also considered a powerful economic force and can be considered a barometer of a country’s overall economy as they often dictate and influence other industries’ practices, standards, and procedures.
A healthy and growing market in the financial services sector is essential to a country’s economy. This is because it contributes to a country’s economic growth by enabling companies to acquire funds to boost production and thus create more jobs. Additionally, it ensures that all sectors of a country’s economy get enough funds to develop and thrive.
The pillars of the financial services sector include investments, banking and capital markets. Investments include buying and selling products (or assets), issuing shares, lending money, and levying taxes to further specific economic goals. Banking includes depositing money into checking and savings accounts, granting loans to individuals and businesses, and offering payment services such as debit cards and wire transfers. Capital markets include stock exchanges, bond markets, and other trading platforms for various securities.