When you think of the term financial services, your first thought may be of banks, mortgage lenders and insurance companies. While these are all part of the industry, there’s much more to it than that. In fact, financial services encompasses a broad sector that impacts everyone from individuals to small businesses to large corporations and even nonprofits.
Financial services are the institutions, services and products that provide investment and credit intermediation. These include depository organizations (including commercial and central banks); financial intermediation service providers such as credit unions, mortgage banking firms and insurance companies; and other credit and financial services providers such as investment banks, brokerage firms and asset management companies.
These services can be as simple as an insurance company providing health, home, auto and life insurance or as complex as a hedge fund investing in stocks. The financial services industry is a key player in many areas of our daily lives, from lending money to family and friends to buying a car or house to saving for retirement.
The industry has seen tremendous consolidation in the past decade. For example, banks have purchased insurance companies and brokerage firms to offer their customers more of a one-stop shop for all of their financial needs. In the United States, these acquisitions are usually made under a holding company which maintains the original brands of the acquired firm. In other countries, however, this approach is not allowed.
One of the benefits of a career in financial services is the relative security that comes with it. The industry is constantly changing, so you’ll likely have the opportunity to learn new skills on the job and keep up with the latest technology. The field is also heavily regulated, which helps ensure transparency and protect consumers.
Another benefit of a career in the financial services industry is that jobs are plentiful, and the pay is competitive. Many people begin their careers in entry-level positions, which allows them to work their way up and gain experience before moving on to higher level roles. The ability to make quick advancements in a role can be particularly appealing for young professionals who are considering a change from their current profession.
Finally, because of the integral nature of financial services in everyday lives, the industry offers great stability. Unlike other fields, there are often few layoffs and employees can move between firms with relative ease. This gives workers a certain amount of freedom to switch jobs or cities without having to worry about the impact on their paychecks.