Financial services is an industry that includes a variety of businesses that offer banking, investment and insurance. The services are provided to individuals, small companies, large corporations and even government agencies. The industry encompasses many different career paths, and it is important to understand the different facets of the business before applying for a job in the sector.
When thinking of the financial services industry, people usually think of banks, stock brokers and mortgage lenders. These are all part of the industry, but there are many more services that fall under this category. The industry also encompasses private equity firms, venture capital providers and angel investors who provide funding to small startups in exchange for ownership stakes or profit participation. It also includes credit card networks, global payment systems like Visa and MasterCard, debt resolution services, currency exchange and wire transfer services and asset management companies.
The primary function of financial services is to provide money management and investing options for individuals, companies, governments and organizations. This is accomplished by providing depository services, such as checking and savings accounts, loans, mortgages, and investment products. These services allow individuals to secure their assets, save for the future and achieve their financial goals.
There are many career paths within the financial services industry, and each provides a different path to success. Those who choose to work in the brokerage sector, for example, are responsible for buying and selling securities on behalf of their clients. This includes research and trading in stocks, bonds, mutual funds, real estate and other securities. This career also entails the use of data and analytics to advise clients on their investment choices.
In the lending sector, financial services are provided to individuals by banks and other credit-granting institutions. These services can include checking accounts, savings accounts, credit cards, loans and mortgages. Some of these services may be offered in conjunction with other credit-granting entities, such as credit unions and community development finance institutions. These services allow individuals to secure money for various purposes, including paying bills, buying a car, starting a business or making a home purchase.
Other important segments of the financial services industry are the insurance and investment management sectors. Insurance is available to protect against the risk of death or injury (e.g., life, disability and health insurance), against the loss of property (e.g., homeowners and auto insurance), or against liability for wrongdoing (e.g., personal and business insurance). Investment management is the process of managing assets to meet a specified investment goal. This can include diversified equity and bond portfolios, as well as structured finance and real estate. Regulatory bodies are another component of the financial services industry, as they oversee different institutions and ensure that their clients are treated fairly. The industry also includes accounting professionals, who keep detailed records of a company’s finances and help with tax filing. This is an important service because it allows individuals and small businesses to pay the correct amount of taxes.