When a nation’s financial services sector is healthy, businesses of all types and sizes benefit. The industry allows capital and liquidity to flow freely in the marketplace, which fosters economic growth and enables businesses to more effectively manage risk. And for consumers, a strong financial services sector means more purchasing power and a higher quality of life.

The industry encompasses a wide range of companies that manage money, including credit unions, banks, credit-card companies, insurance firms, consumer-finance companies, brokerages and investment funds. It also includes accounting and tax-filing services, currency exchange and wire transfer services, as well as global payment providers such as Visa and Mastercard. Financial services companies are present in all economically developed geographic locations and tend to cluster in local, national, regional and international financial centers.

While many people think of banks, credit-card companies and mortgage lenders as separate entities, these are all part of the same industry. So are investment agencies and stock market brokers. Financial services providers help channel cash from savers to borrowers and redistribute risk. They do this by aggregating savings and monitoring investments, as well as pooling risks so that individuals don’t have to bear too much of it.

To do this, they must maintain a high level of trust among savers and borrowers. This is why most countries regulate the industry, ensuring that borrowers and savers are treated fairly and that intermediaries don’t take advantage of either. People could handle most of these transactions themselves, but it’s often more efficient—and often more cost effective—to pay someone else to do it for them.

The financial services industry is a vital component of any economy, as it enables businesses and consumers to make large purchases with confidence. Whether it’s buying a car, a new home or equipment for a business, consumers and businesses alike need access to loans and other forms of financing. Without financial services, it would be very difficult to create and grow a company, purchase a new vehicle or even pay for an unexpected medical bill.

Financial services also provide a crucial safety net for people and families when disaster strikes. Nearly 2 billion people lack access to essential financial services like a bank account, credit card or health, property or life insurance. Financial inclusion is key to improving lives and enabling people to make the most of their potential.