Financial innovation refers to the development and introduction of new financial instruments, products or services that help improve the efficiency of financial markets. It involves creating new ways to manage risk, raise capital, invest money, and transfer funds. Financial innovations can be in response to market needs, changes in regulation, technological advancements, or other factors that influence the way people handle their finances. These innovations aim to provide better solutions for financial management, investment opportunities, and risk mitigation. Examples of financial innovations include credit cards, mortgages, derivatives, online banking, mobile payments, and cryptocurrencies.