Whether it’s banks, mortgage lenders or investment firms, financial services are a diverse industry. The sector encompasses everything that touches money and can impact people’s lives – not just large Wall Street firms or savvy investors, but small community banks, insurance companies and nonprofits, too. Many people equate financial services with banking, but it goes much further than that. It includes all the intermediation of cash: providing savings accounts; deposit-taking (and lending) facilities; credit and debt services, such as loaning, hiring, leasing or housing finance companies; money markets and capital market utilities; securities trading and exchanges; and payment systems.

It makes it possible for consumers to buy goods and services that they need or want (such as a new car or a house) and to improve their quality of life by purchasing those goods and services. It also enables businessmen to maximize their production and increase profits by providing them with adequate funds through loans or equity participation. It protects individuals and businesses from losses due to unforeseen events (like natural calamities or accidents) by providing them with insurance policies.

It helps to develop the primary, secondary and tertiary sectors of the economy which in turn creates employment opportunities and enhances the standard of living. It also ensures that the monetary resources are distributed evenly between the savers and borrowers in the economy. It also contributes to the growth of the service sector which is an important barometer for economic dynamism.