Financial services provide an essential service to the economy. They advance loans to businesses and individuals, grant mortgages for homes, and protect consumers and companies from loss through insurance policies. They also serve as an investment channel for the public and help to build savings for retirement and other expenses. The financial sector is a huge part of the global economy and employs millions of people worldwide.
The industry is being shaken up by consolidation and a market collapse that has caused many to call for increased regulation. Regulatory agencies are designated to oversee different parts of the financial services industry, uphold transparency, and make sure that providers are treating customers fairly.
As the industry continues to evolve, there are countless job opportunities in a wide range of specialties including credit card processing, wealth management, and digital banking technology. These jobs offer the opportunity to work on some of the most cutting-edge technology in the world and are often highly paid.
A financial good is a product that lasts for a long or short period of time and can be used by more than one person, such as a car or a house. A financial service is the transaction that a consumer goes through to acquire a financial good, such as an auto loan or life insurance policy.
Among the most critical financial services is deposit taking, where banks act as middlemen between savers and borrowers. They collect deposits from those who have money to spare, pool them together, and then lend the funds to borrowers. Deposit taking is also the foundation for other financial services like extending loans, credit cards, and investment products to individuals.
Other services provided by the financial industry include providing investment advice to help individuals grow their assets, such as stocks and mutual funds. These firms often charge a fee for their services. Financial services also include facilitating trading in the stock market, which includes buying and selling shares of companies or bonds. This is the primary source of revenue for most financial services firms.
In addition to the aforementioned services, financial institutions also provide asset management, which is the process of managing and protecting assets. These services may include creating trusts, holding securities, and advising clients. Lastly, they manage payment systems to facilitate transactions through credit and debit cards, bank drafts such as checks, and electronic funds transfers.
In order for a country’s economy to thrive, it must have a healthy financial sector. This sector advances loans for business expansion, grants mortgages to homeowners, and insures people and companies against losses from unforeseen circumstances. This is a vital service for all economies and helps to create jobs and improve people’s lives. Nearly 2 billion people around the world lack access to even basic financial services, such as a checking account or safe place to store their savings. Increasing their economic inclusion will allow them to grow their microenterprises, invest in their children’s education, and seek medical treatment when necessary.