Financial services include an array of economic activities. They range from banks and credit-card companies to credit unions. These companies provide financial services to both businesses and consumers. The services they provide are crucial to the economy as a whole. Providing these financial services is the primary goal of the entire finance industry. However, a wide variety of other businesses can also provide these financial services.

Banks and financial service providers channel cash from savers to borrowers. The providers then make a profit off the difference between the deposit and the loan. They also help businesses buy and sell securities and raise money. They also lend money to people who need it. These people then pay back the money plus interest. Other financial service providers assist individuals with investing, debt management, and saving.

Another important function of financial services is to enable the government to raise funds. The money market is an important part of financial services and a major source of short-term funding. Commercial banks purchase Treasury Bills from depositors. In addition to this, the foreign exchange market can help governments meet foreign exchange requirements. Financial services also provide opportunities for the government to invest in a variety of businesses, such as real estate.

The financial services industry is continually changing. Changing customer needs, technology, and regulation are changing the way that these companies operate. This has created a lively market for partners in the industry. Traditional banks are also expanding their reach through acquisitions and organic growth.