Financial services are vital to the operation of the economy, enabling people and businesses to make big purchases and save for the future. They also allow for the free flow of capital and market liquidity, which supports business expansion and risk management.
Financial institutions accept deposits from individuals and businesses in the form of checks, savings accounts and other deposit products. They also extend credit to customers by providing loans and lines of credit. These lenders evaluate the creditworthiness of borrowers and set interest rates for their products. They may also invest the funds they receive from depositors in securities and other assets. They also manage the money markets, which provide short-term funding for governments through the issue of Treasury bills and long-term funding through the sale of bonds in the securities market.
Other types of financial services include debt resolution, which is a third-party service that negotiates with creditors to allow consumers to pay less than they owe. Payment services, such as credit and debit card payments, are also a type of financial service. These companies help businesses process credit and debit transactions, while taking a cut of each transaction.
Because of their importance to the economy, many government agencies regulate and oversee different parts of the financial services sector. These agencies uphold transparency and ensure that clients are treated fairly. They may also establish rules and standards to protect consumers from fraudulent practices. Careers in financial services are often fast-paced and stressful due to the pressure to meet sales targets or quotas. They can also be rewarding, as these employers are known to promote from within based on merit.
