Financial services include a wide range of businesses that deal with money. They provide help to private citizens by helping them save and invest their funds as well as providing protection against certain types of losses, and they also aid business by enabling them to maximize their profits and expand their operations both nationally and internationally.
Some examples of financial services are insurance, banking, credit unions, investment management, and securities trading. They are usually divided into two categories: wholesale and retail financial services. Wholesale financial services are broader in scope and include all forms of market intermediation, such as deposit-taking, loan and investment management.
The retail category of financial services consists of the more consumer-oriented businesses, such as insurance companies, credit unions, mortgage brokers, and stock brokerage firms. Some of these firms may specialize in a particular type of customer, such as senior citizens or small business owners. Others may offer a more generalized set of services.
The financial sector is important to the economy because it includes such things as money markets, debt capital markets, and foreign exchange markets. This sector of the economy mobilizes savings from the public and makes them available to investors, thus enabling a country to grow economically. It is also an essential part of the world’s economic system and is a critical contributor to the gross domestic product (GDP) of every country.