Financial services provide services for people and organizations that help them make money and save it. For example, banks lend money to people who need it and earn interest on the difference. They also give investment advice and manage funds for clients. Some financial service providers also offer insurance. However, not all of these services are suitable for everyone.
Financial services can be broadly classified into consumer and corporate. Consumer financial services include credit cards, loans, savings accounts, insurance, and payments. These services are increasingly becoming digitized as consumers move toward self-management. Moreover, consumers are increasingly choosing to manage their finances from the comfort of their homes, which means that the financial institutions are introducing new services.
Financial services have many benefits for the economy. They enable companies to increase their goodwill, promote economic growth, and encourage diversification. By providing financial services, companies can finance their investments, create employment, and save money. In addition, they allow companies to increase their profits and expand their businesses. This ensures a balanced growth in the economy.
Financial services are essential for the functioning of an economy. Without them, a company might struggle to raise funds and buy goods. A vibrant capital market is an indicator of a healthy economy. But if investors and companies don’t have sufficient funds to invest, it will adversely affect their business.