Financial services are the activities performed by companies that handle money and credit, such as banks and lending institutions. The industry advances loans to businesses that need money to grow, grants mortgages to homeowners and issues insurance policies to protect people and property from unforeseen events and losses. A strong financial sector is vital to a country’s economy and can provide jobs for millions of people.
A career in financial services is challenging, but rewarding. If you are serious about a job in the industry, find a mentor and keep networking. A mentor can give you valuable advice and guidance, helping you to navigate the tough times in the career. The industry is highly competitive, so be prepared to work hard to rise through the ranks.
Whether it is investment banking, wealth management or commercial and consumer finance, financial services are the backbone of the global economy. These companies touch everyone’s lives on a daily basis, from the local grocery store clerk to the corporate CEO. Financial services include everything that has to do with money, including savings accounts and investments, but also credit cards, mortgages and insurance. This industry includes thousands of depository institutions, providers of investment products, insurance companies and credit-granting organizations. It also encompasses a broad range of support services, such as accounting and tax services, currency exchange and wire transfer agencies, credit card networks and machines, debt resolution firms and global payment systems.
When a country’s economy is growing, the financial sector is healthy. This means that consumers are making more money and spending more, which in turn helps businesses of all sizes to expand and hire additional workers. However, a crisis in the financial sector can drag down the entire economy and create recessions and depressions. This is why it’s so important for the industry to be well-regulated and managed, preventing financial firms from getting too big and taking on more risk than they can handle.
Many families in developing nations save money in a financial institution, rather than storing cash under the floorboards or in a jar in the kitchen. This allows them to buy land, build or improve houses, purchase livestock and consumer durables, and start or expand a business. It can also help them take advantage of healthcare and education opportunities for their children.
The financial sector provides investment services, such as brokerage and mutual fund companies, to individuals seeking to grow their money or diversify their portfolios. It also offers credit-rating services to businesses and individuals, allowing them to borrow money with confidence. Finally, it offers risk-management services, such as reinsurance, which is sold by insurers to cover catastrophic losses for other companies.
The financial sector can be volatile, but it is crucial for a nation’s economic health. A strong industry can generate new employment opportunities, while a weak one can halt economic growth and cause widespread unemployment. To avoid such a scenario, central banks typically lower interest rates to encourage capital investment and spur spending.
