The financial services industry encompasses a wide range of professional firms that help people and businesses acquire and manage financial “goods.” These include insurance companies that offer health, life and property protection; banks that accept savings deposits and provide loans; investment banking firms that advise clients on mergers and takeovers; money management firms that invest clients’ assets; credit card companies; accounting and tax filing firms; and credit unions. The industry also includes global payment providers such as Visa and Mastercard, and exchanges that facilitate stock, derivative and commodity trades.
The types of financial services available in the sector vary by country. However, there are four broad categories of services that most people will need at some point in their lives: Insurance – Underwriters and brokers buy and sell policies to protect against the risk of illness, death, job loss or property damage; agents and brokers act as representatives for insurance carriers and shop around to find the best prices and coverage for customers; and underwriters assess and approve loan risks.
Regulatory services – Government and independent agencies oversee different parts of the industry to ensure compliance and transparency, and to protect consumer interests. For example, the Securities and Exchange Commission (SEC) regulates stocks, mutual funds and exchange-traded commodities. Private banking – Financial services provided exclusively to high net worth individuals, typically through family offices. These typically offer customized banking and investment solutions tailored to the needs of wealthy families.
Capital markets – Provides debt and equity capital to public and private entities, helping them raise money for expansion and growth. This includes underwriting, advising and structuring mergers and acquisitions, and providing advisory services.
Asset management – Manages pensions, hedge funds and insurance assets for individuals, institutions and other investors. This is a highly specialized area that often requires in-depth knowledge of specific industries and the ability to make sophisticated investments.
Financial services firms that assist individuals in managing their finances include wealth management firms, private banks and financial planners. These firms usually require a degree or equivalent experience in the field and may work directly with the client to determine their unique needs.
Consumers who have control over their personal finances are more resilient in the face of unexpected challenges and better able to save for future needs. The financial services industry has a vital role to play in building customers’ financial wellbeing, and it is essential that consumers understand the products and services they use. This will allow them to be more confident making the right choices about how they borrow, invest and save. With more and more people struggling to keep on top of their finances, the need for quality financial services is greater than ever before. This means that there is a big opportunity for fintechs, banks and credit unions to grow their business. As a result, many workers in the sector are finding themselves in more fulfilling careers. The pay in this sector is not enormous, but it is competitive and there are opportunities to advance quickly if you perform well.