Financial services play a vital role in the modern, interconnected world. They help people make money, save and invest. Companies and organisations rely on financial institutions to help them raise capital and mitigate risk. This industry includes banks, insurance companies, investment firms and more. There are many jobs in the financial services industry and each one offers different career options. But before you decide which one is right for you, you need to understand the scope of the industry and what it offers.
The banking industry provides lending and deposit services. Banks accept deposits from customers and earn revenue by charging interest rates. Banks may also create their own brokerage divisions or insurance units to provide financial products and services.
Insurance services are a type of financial service that help protect consumers from large unforeseen expenses. Insurance companies offer life, health, property and liability coverage. Many community-based nonprofits offer free financial advice and counseling. People use insurance to help them pay for accidents, medical bills and other emergencies. In addition to traditional insurance, there are more specialized types of insurance, including life insurance and retirement plans.
Investment services include structured finance, which develops intricate products for high net worth individuals and institutions. Private equity funds supply investment capital to companies. Various alternative sources of capital are reshaping the financial services industry.
Consumer finance is a subset of financial services that helps people buy goods and services. Among the most popular companies are credit card companies and mortgage lenders. Credit unions are also part of the industry. Some companies also offer rewards programs for consumers who spend at specific restaurants and gas stations.
A variety of companies, including Berkshire Hathaway, own insurance companies. Some of these companies also offer tax filing and other services. Others, such as American Express, are known for their payment services.
Financial services are regulated by government laws to ensure the public’s safety. A weak financial services system can drag a nation’s economy down. However, a strong system can encourage consumer confidence, boost purchasing power and increase economic growth.
The industry is characterized by specialization and globalization. There are thousands of depository institutions and other credit and financing organizations. The industry’s infrastructure includes financial market utilities such as stock exchanges, clearing houses and commodity exchanges.
Financial services are highly dependent on IT systems. Digital technology is rapidly reshaping the industry. The industry is changing from a few large, one-stop shops to a multitude of firms competing at different points along the value chain. These changes will take a few years to come to fruition. Nevertheless, disruption is taking place, and many new companies are launching digital services to meet consumer needs.
The financial sector is an exciting place to work. It offers a variety of options, and there is a wide range of skills and experience you can build upon. Whether you are interested in an insurance job or a position in investment management, you can find a financial services opportunity that will fit your personality and interests.