Financial services are a large part of the economy that help with making, investing and managing money for individuals and businesses. This includes banks, credit unions, mortgage lenders, credit card companies and much more. This industry is not only vital to people but also helps small businesses, nonprofits and even governments.
One of the most common types of financial services is insurance. This is a system that people pay into monthly or annually which acts as a safety net for them in case of any unexpected events. There are many different kinds of insurance like health, life and auto insurance.
Another type of service provided by financial services is lending and borrowing. Banks offer checking and savings accounts to their customers while loan associations and banks provide mortgages and auto loans to consumers. This industry also allows people to invest their money in the stock market or mutual funds. This helps the consumer gain a higher return on their investments.
Financial services also help to promote domestic and foreign trade. Factoring and forfaiting companies promote the sale of goods in domestic markets while exports are promoted in the foreign markets. This is a great way to encourage more production, employment and demand for goods. The tertiary sector of the economy grows as a result which helps to improve economic dynamism.