Financial services is a broad industry comprising a range of firms that manage money. They include banks, credit-card companies, insurance providers, stock brokerages and investment funds.
The economic services that the financial services industry provides are essential to the functioning of an economy. Without them, savers would not have the money to borrow, and borrowers would not be able to make purchases.
Banks and other financial providers help channel cash from savers to borrowers by lending out the money or investing it in the hope that they can generate higher returns than what they pay for it. They also pool risk, allowing investors to spread the risk of losses to many different people instead of one or two.
Moreover, the financial sector provides important services to government by raising short-term and long-term funds through the money market to meet revenue and capital expenditure requirements. Similarly, it can raise the required funds for foreign exchange transactions through the foreign exchange market.
As the world becomes more digital, financial services organizations are relying on big data to better understand their customers, predict their needs and personalize their customer experience. These organizations also need to rethink how they operate and what products or capabilities they need to provide customers with a superior financial experience.