Understanding market dynamics and keeping abreast of developments are essential skills for professionals in the financial sector. This module provides an overview of the key factors influencing the markets and the main actors within the financial landscape. It also explores financial legislation and regulation and consumer affairs.
The financial sector and the entities operating in the sector are affected by numerous factors, including globalisation, digitalisation, social change, customer behaviour, fiscal policy, interest rate and currency exchange policies and economic cycles. Likewise, the sector is shaped by the growing importance of securities markets and the changes in the levels, composition and distribution of wealth. It is crucial for professionals in the sector to be aware of these influences and understand how they affect their work.
Financial market participants
Institutions operating in the Finnish financial market can be divided into deposit banks and other financial and credit institutions. Deposit banks provide basic banking and payment services. Credit institutions include finance houses, credit card companies, mortgage banks and specialised credit institutions. Deposit banks and credit institutions require a licence issued by the Finnish Financial Supervisory Authority (FIN-FSA) and the European Central Bank (ECB).
Other financial institutions offer services such as investment, venture capital and insurance. 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. 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.
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