Institutions operating in the Finnish financial market can be divided into deposit banks and other financial and credit institutions. Credit institutions include finance houses, credit card companies, mortgage banks and specialised credit institutions. Other financial institutions offer services such as investment, venture capital and insurance. Deposit banks and other credit institutions require a licence issued by the Finnish Financial Supervisory Authority (FIN-FSA) and the European Central Bank (ECB). The distinction between banks and other financial institutions has narrowed, with some banks now functioning as full-service financial groups that offer a wide range of banking, asset management and insurance services.
Financial institutions
In simplified terms, financial institutions operating in the market collect funding from households, businesses and organisations, and from capital and money markets. They then channel this funding into loans and securities investments. Banks also provide payment services.
Read more about the role of banks
Insurance companies
Insurance companies are categorised by their operations into life, non-life, pension and reinsurance companies. By law, the different lines of insurance must be separated under different companies, although they often operate as part of cooperative groups. Private insurance institutions also provide a significant part of the social security and statutory insurance coverage in Finland. The purpose of insurance is to protect individuals, businesses and organisations against financial loss. Insurance is increasingly used for future planning and building a secure life.
Read more about the principle of insurance
Social security in Finland
Everyone residing in Finland is entitled to relatively comprehensive social security. This right does not depend on citizenship; instead, the benefits are largely based on the beneficiary’s employment status in Finland. Public social security is complemented by additional solutions offered by various financial sector providers. These are typically contractual and voluntary.