Whether you’re looking to buy a home, finance a new business or secure a loan for a medical procedure, a healthy financial services sector is vital. These services enable individuals to purchase what they want and need by pooling their money into loans, credit cards, savings accounts, mortgages, investments and more. They also make it possible for people to save up for future expenses and protect their assets with insurance.
A healthy financial services industry involves more than just banks, brokers and credit card companies. It includes investment firms, asset management firms and others that offer a range of services to individuals, small businesses, large corporations, and even the government.
Banks are the backbone of the financial services industry, acting as middlemen between savers (who deposit their funds with the bank) and borrowers (who borrow the money for various purposes). They provide depository services through checking accounts, savings accounts and certificates of deposits. They also lend money by providing personal, student and small business loans. Banks assess the creditworthiness of borrowers and set interest rates.
Other areas of financial services include debt resolution, which helps individuals with outstanding bills and credit issues negotiate a settlement that allows them to pay less than they owe. Payment recovery is another area of this industry, assisting businesses in recovering money that they may have mistakenly paid to vendors. The financial services sector is also responsible for managing pensions, insurance assets and more.