To Discuss Shadow Banks, Especially Their Services, Advantages, And Disadvantages

Shadow BankingNameInstitutional AffiliationShadow BankingIntroductionThe banking sector being part of the finance industry is a vital component in today’s society. The industry provides financial solutions to the people, an organization both private and public, and the government. Schoenmaker and Peek (2014) describe the central role of the finance institution especially banking is of interest to the public, in particular with the occurrence of economic crisis including depression. The rise of financial institutions, such as shadow banks, and robo-advisor especially with the development of technology provides numerous challenges as well as opportunities to investors. Therefore, it is important to discuss shadow banks, especially their services, advantages, and disadvantages. Moreover, it is necessary to provide the recommendation for or against the use of these banks to investors having analyzed their pros and cons. ConceptsIt is important to begin by understanding what a banking system is. By definition it includes the institutions providing financial services such as loans, making deposits and providing a payment system. Next, an important term to consider in the discussion is an investor. According to Hoffmann, Post, and Pennings (2015), an investor is an individual