Financial services is a business sector which deals with various kinds of works related to changing savings into investments. This business sector helps in generating employment in the country. The various services offered by this industry include money management, credit cards, insurance and investment opportunities. It also helps in mobilizing the saving of the people in the country which is very important for the economic growth.
The services provided by the financial sector involve transferring money from savers to borrowers. The various financial institutions act as intermediaries between the depositors and the borrowers by providing them with the facility to invest their funds in the productive enterprises which yield a good amount of profit on the acceptable risk. The borrowers are given loans which they repay according to the income pattern of their household.
Aside from facilitating transactions between the savers and the borrowers, the financial services sector also works in reducing the risks to the investors. This is done by providing the various facilities to make the investment risk-bearing in optimum levels. The various kinds of financial services like banking, credit unions, insurance companies, investment firms and monetary authority work together in this process to reduce the risks and make the investors feel safe.
The financial services sector also involves a number of different types of activities such as debt management, mortgage finance, asset management, credit rating and ratings agencies. These industries are responsible for the management of pensions, insurance assets, hedge funds and mutual funds. Moreover, these industries are involved in the underwriting of debt and equity for private and public companies for them to raise capital. This industry is also involved in the merger and acquisitions of businesses. Lastly, the financial services sector includes a wide range of global payment systems such as the credit card networks and international money transfer providers, and debt resolution and credit scoring services.