Such products have lowered the cost and broadened the scope of financial services, making it possible for borrowers and lenders to transact directly with each other, for a wide range of financial products to be tailored for very specific purposes, and for financial risk to be managed in ever more sophisticated ways.
Financial innovation has been the driving force behind a second major trend in banking -- the blurring of distinctions among what were, traditionally, very distinct forms of financial firms. One of the first such innovations, with which we are all now very familiar, was money market mutual funds.