Financial services are the businesses that help people save, invest and manage their money. They provide a crucial component of the economy, and a healthy financial sector helps the world’s economies grow. Financial services can be provided by banks, credit unions, credit-card companies and investment firms. They also include debt resolution services, which negotiate with creditors to allow borrowers to pay less than they owe. Another kind of financial service is payment processing, which allows companies to accept debit and credit card transactions from customers.
Financial services help to channel cash from savers to borrowers, and they redistribute risk. They also provide liquidity in the marketplace, which allows for the expansion of the economy and enables business to function properly. Moreover, they play an important role in minimizing the impact of economic fluctuations and natural calamities.
The different kinds of services that are part of the financial services industry include savings accounts and checking accounts, credit cards, mortgages and loan facilities. Investment firms, brokerage houses, and private equity funds also fall into this category, as do life insurance companies and retirement planning services. Some financial services also involve a level of intermediation between money and risk, which may be accomplished by providing credit ratings and market information.
In addition to offering a variety of services, the financial services industry is regulated in most countries. This means that individuals and companies working in the field must obtain certain licenses, and carry professional liability insurance, such as errors and omissions coverage, to protect themselves from lawsuits related to their work. The industry is also constantly changing, with technology companies from completely different sectors, such as Amazon and Apple, starting to incorporate banking-as-a-service into their products.
One of the most significant barriers to entry in financial services is a lack of relevant skills, but it is possible for people to build up the required experience on their own. Those seeking to work in this sector can start by getting an internship or an entry-level position with a company. From there, they can work their way up, building on the experience they have gained.
The best way to enter the field is through a strong network, as it can be difficult to break into a company without connections. Once in, there is the potential for high salaries and flexible working conditions. In addition, many employers offer a good amount of annual leave. However, the quality of these benefits tend to vary from one employer to the next. For example, some might offer flexible hours, while others will only do so for senior staff. This makes it important to research the various roles available before making a decision about which career path to follow.