A financial institution (FI) is a company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange.
Financial institutions encompass a broad range of business operations within the financial services sector including banks, trust companies, insurance companies, brokerage firms, and investment dealers.
Virtually everyone living in a developed economy has an ongoing or at least periodic need for the services of financial institutions.
Financial institutions facilitate the smooth working of the financial system by making investors and borrowers meet.
They mobilize the savings of investors either directly or indirectly via financial markets, by making use of different financial instruments as well as in the process using the services of numerous financial services providers.
They could be categorized into Regulatory, Intermediaries, Non-intermediaries and Others. They offer services to organizations looking for advises on different problems including restructuring to diversification strategies. They offer a complete array of services to the organizations who want to raise funds from the markets and take care of financial assets for example deposits, securities, loans, etc.