Financial services are companies or businesses that provide money and asset management, banking, insurance, payment, and other financial products. These services are vital to the economy, as they help consumers make more money and spend it on other goods and services. A strong financial sector can boost a country’s economy, while a collapsed one can lead to a recession or depression.

There are many types of financial services, some more traditional than others. For example, a bank offers checking accounts and credit cards to its customers, while an investment firm provides specialized advice or funds to investors. Some financial service providers offer debt resolution services to help consumers reduce their debt burden, and others operate as credit bureaus, reporting information about borrowers to creditors.

In addition to consumer services, financial service providers also support business growth by financing and supporting investments and trade. They promote domestic and foreign trade through factoring, forfaiting, and export financing, as well as help backward regions economically develop by providing fiscal and monetary incentives.

The financial services industry is highly regulated, with laws in place to protect consumers and prevent crimes such as fraud, money laundering, and insider trading. Governments require financial services providers to follow strict rules, such as giving clear documents and fair treatment to their customers, and maintaining detailed records of their business transactions. Financial services companies may also be required to report suspicious activities to government agencies, and they may have to conduct background checks on their employees.