Financial services is a wide-ranging sector that includes banks, insurance companies, investment firms and other organisations that deal with money. These sectors are vital to a country’s economy, and they play a crucial role in maintaining economic stability.
Banks, insurers and other financial services providers are essential to the operation of a society’s financial system and serve as a central point for transactions that occur between individuals, businesses and governments. They provide a variety of financial goods and services, such as securing mortgages and making loans.
The financial services industry is a large and diverse sector, with several sub-sectors. These include banking, financial planning, investment and wealth management, family offices, insurance and reinsurance, and financial technology.
Banking
The largest and oldest sector is commercial banking, which provides a range of products and services to both consumers and businesses. These include checking and savings accounts, deposits, credit cards, mortgages, loans and other types of debt.
Some banks, such as Barclays and Royal Bank of Scotland, also offer investment advice to customers. This service can be used to build a portfolio of stocks or bonds and invest in them.
Investment banks and funds manage money for their clients, who are often wealthy individuals or business owners. These organisations have expertise in a variety of areas, including equity and fixed income securities, real estate, commodities and alternative assets like hedge funds.
Asset management
The last major sector of the financial services industry is asset management, which deals with pensions and insurance assets. This can be a very broad category, but it typically includes asset managers, hedge funds, mutual funds and even some insurers.
Insurance is another important sector, offering protection against death, disability, property loss and other events that can threaten the lives of people. It can be used for a variety of purposes, from protecting someone from a catastrophic injury to helping to take care of a business that has suffered damage or lost revenue.
Besides insurance, the financial services industry also includes other kinds of investments, such as private equity funds and venture capital companies. These organisations supply investment capital to businesses in exchange for ownership stakes or profit participation.
This can help to finance the development of new businesses, or to acquire existing ones, and can also lead to increased productivity within a company or organisation. The growth of the financial services sector is a key indicator of a healthy economy.
When the economy is strong, consumers earn more and are able to purchase more. The strength of the financial services sector also helps to boost consumer confidence, which can make it easier for them to spend.
Professionals in the financial services industry report a high level of job satisfaction, with an average score of 9.6 on a scale of 10 (which means they feel very happy). As a result, there are many career options available to those interested in working in this area.
The pay for a career in financial services isn’t huge, but it can be very competitive. Depending on the specific position, you may need a degree, but a good deal of a career is determined by interpersonal skills and your ability to work well with others.
