Financial services are a broad group of businesses that manage money for individuals and organizations. They help people with investment, trading and putting money away for the future. They also handle loans, credit cards and other consumer products.
These companies provide the backbone for the economy. They are a huge part of the service sector, which accounts for more than half of the economy in most countries. Financial services can be broken down into four different categories: depository institutions, lending institutions, brokers and other market makers and insurance and reinsurance.
Depository services include handing depositors their money in checking and savings accounts, which earn interest, and lending that money to people who want it for things like buying a house or starting a business. About 10% of the money deposited in banks must stay on hand at all times, as dictated by federal regulations, but the rest is available to lend. Lending institutions evaluate borrowers’ creditworthiness and offer loans to those who can show they can afford the repayments.
Brokers buy and sell securities on behalf of their clients. They usually have their own research departments that provide information to their traders and maintain a public stance on specific stocks and industries. They can also offer prime brokerage, an exclusive type of bundled broker service that caters to high-net-worth clients.
Insurance services are another major category and encompass a wide range of products. People purchase insurance policies to protect themselves against unforeseen events, such as sickness, injury or death. They also purchase insurance to cover the costs of their property in case it is damaged or destroyed. Insurance can be purchased for a variety of reasons, from mortgage protection to life insurance.
Finally, markets makers and other market makers help to keep the financial system functioning properly by regulating capital flows, providing liquidity and ensuring compliance with laws and rules. This is one of the most important roles of financial services, as it helps to keep people confident in the banking system and reduces the risk of breaking laws or losing money in illegal activities.
A career in the financial services industry can be highly rewarding for the right person. It is generally a very secure field, which can give people the freedom to move from company to company or city to city without fear of losing their jobs. This can be a big draw for younger professionals who are looking to advance quickly in their careers.
As a result of the growth of this industry, there are countless opportunities for young talent to find their niche and build a rewarding career. There are many ways to get started, from becoming a paralegal to getting a job in customer service. Whatever route you choose, it is important to learn as much as possible and be ready to adjust your strategy at any time. Phyton Talent Advisors works with financial services professionals every day, so we understand how exciting and challenging this career path can be.