Financial institution

A financial institution, sometimes called a banking institution, is a business entity that provides service as an intermediary for different types of financial monetary transactions. Broadly speaking, there are three major types of financial institution:

  1. Depository institution – deposit-taking institution that accepts and manages deposits and makes loans, including bank, building society, credit union, trust company, and mortgage broker;
  2. Contractual institution – insurance company and pension fund
  3. Investment institution – investment bank, underwriter, and other different types of financial entities managing investments.
"Banking institutions" redirects here. For banks as financial institutions, see Bank.

Financial institutions can be distinguished broadly into two categories according to ownership structure:

Some experts see a trend toward homogenisation of financial institutions, meaning a tendency to invest in similar areas and have similar business strategies. A consequence of this might be fewer banks serving specific target groups, and small-scale producers may be under-served. This is why a target of the United Nations Sustainable Development Goal 10 is to improve the regulation and monitoring of global financial institutions and strengthen such regulations.

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