Financial services are the industry that encompasses everything from banking and insurance to credit and lending, and everything in between. It is one of the largest industries in the world and offers a diverse range of career opportunities that can be highly lucrative. However, deciding what role within this industry is the right fit for your career goals can be challenging given the wide array of choices.
To help you determine what kind of role is right for your future, we’ve broken down four key roles in financial services to give you a better idea of the many options that are available to you.
A good definition of financial services is “the market that provides the products and services that enable individuals to invest in, acquire, protect, and use economic goods.” The economy relies on the financial services sector to provide the capital needed for growth and a prosperous society. The stronger the financial services sector is, the more money is available to spend. This has a positive impact on consumers and businesses, and a weak financial services sector is a sure sign of an economic downturn.
The different types of financial services include depository institutions, providers of investment products, credit and financing organizations, insurance companies, and the providers of critical financial utilities. Investment services allow people to make money by investing their savings in stocks, bonds, mutual funds, and other assets. They also provide advice and information to help people with their investment decisions. Financial services also include debt resolution, which helps people pay off their debts without damaging their credit ratings. They also manage payment systems, which enable people to transfer funds electronically or through bank drafts such as checks and credit cards. They also facilitate trading in securities and commodities, which involves buying or selling shares of a company or a piece of land.
Lastly, financial services include those that help reduce risk for investors and borrowers. They do this by channeling cash from savers to borrowers, redistributing risk through pools (like banks taking on the risk of lending to borrowers who they could not pay back, while allowing depositors to shed that risk), and adding value to investments through monitoring and expertise.
Regulatory bodies also play an important role in the financial services industry. These are independent agencies that oversee different financial institutions to ensure transparency and fair treatment of clients. Examples of regulators include the Financial Industry Regulatory Authority and the Office of the Comptroller of the Currency. They are there to protect the interest of both the public and private sectors. They ensure that the financial services industry is working as it should and keep any risks to a minimum. Having strong regulation in the financial industry is essential for the stability of the economy. Without it, the economy will likely suffer. This is especially true when a financial crisis occurs, such as the housing bubble in 2007. The collapse of this sector led to a global recession that has had long-lasting effects on the world economy.