Financial services are businesses that provide economic services to their customers. These businesses include credit unions, banks, and credit-card companies. They offer financial advice, facilitate account transactions, and pool risk by underwriting insurance and annuities. They help people save and invest money. In addition, they facilitate the sale and purchase of stocks and bonds.
Financial services are a source of finance and a source of savings
Financial services provide people with a variety of financial services that can help them manage and put their money to productive use. Consumers can put their savings into accounts through intermediaries, and these institutions can invest their money in technology or help people purchase houses. This intermediated flow of finance can be complicated, and governments rely on regulation to protect consumers and maintain trust.
The provision of financial services is crucial for the functioning of the economy. Without financial services, people would have a hard time finding a need for borrowing and would be unable to purchase many goods.
They pool risk by underwriting insurance and annuities
Financial services pool risk by underwriting insurance and investments to share the costs and risks of the transactions. The industry uses a Syndicate, which is a group of insurance companies with a common capital pool. Syndicates are led by active underwriters and backed by capital from Names that sign onto the syndicate. Underwriters then enter into insurance contracts with delegated authority from the capital providers. Financial services also pool risk by underwriting annuities.