Financial services are the companies that help people put their money to good use. They help individuals save and invest, and they provide businesses, large corporations, small businesses and the government with the capital they need to grow. Financial services also include the redistribution of risk through insurance and other means.

Credit card companies, investment firms and banks are all part of the financial services industry. Many of these companies specialize in one type of service, but some are conglomerates that offer products across multiple sectors.

Some examples of financial services are debt resolution, payment recovery and asset management. Debt resolution helps consumers who are insolvent but do not want to file for bankruptcy. Asset management services help companies manage their investments. Private equity funds and venture capital providers supply investment capital to companies in exchange for ownership stakes or profit participation. Some of these companies are known as “angel investors.” Payment recovery is the process by which a company helps recover money that has been paid to vendors in error, such as duplicate payments for goods and services or incorrect delivery addresses.

A strong financial services sector is critical to a country’s economy. It typically leads to higher consumer confidence and purchasing power, which is beneficial for all businesses—big and small. However, a weak sector can quickly bring about recessions and depressions, which are bad for everyone. That’s why it’s important for countries to focus on regulations that encourage a healthy financial services sector.