Financial institution

A financial institution, sometimes called a banking institution, is a <a href="/facts/Business_entity/dRz8BNnu">business entity</a> that provides service as an intermediary for different types of financial monetary transactions. Broadly speaking, there are three major types of financial institution:

<ol><li>Depository institution – <a href="/facts/Deposit_(finance)/fVK5rTeP">deposit</a>-taking institution that accepts and manages deposits and makes <a href="/facts/Loan/bPaAc9HT">loans</a>, including <a href="/facts/Bank/l7VsKwas">bank</a>, <a href="/facts/Building_society/epGlvB6m">building society</a>, <a href="/facts/Credit_union/Wk1eRyfr">credit union</a>, <a href="/facts/Trust_company/XAQnGAH5">trust company</a>, and <a href="/facts/Mortgage_broker/18T6zHru">mortgage broker</a>;</li>
<li>Contractual institution – <a href="/facts/Insurance_company/06VP8I3B">insurance company</a> and <a href="/facts/Pension_fund/2xfNIHWS">pension fund</a></li>
<li>Investment institution – <a href="/facts/Investment_banking/WcxWICfI">investment bank</a>, <a href="/facts/Underwriter/75rr1GD7">underwriter</a>, and other different types of financial entities managing investments.</li></ol>
Financial institutions can be distinguished broadly into two categories according to ownership structure:

<ul><li><a href="/facts/Commercial_bank/s7hDSmK4">commercial bank</a></li>
<li><a href="/facts/Cooperative_banking/GvD0j0A2">cooperative bank</a></li></ul>
Some experts see a trend toward <a href="/facts/Homogenisation/y84KQJxl">homogenisation</a> 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.

Financial institution open-in-new

Financial institution