What Is Financial Services?

Financial services is an industry segment that encompasses a wide variety of professional firms that help individuals and businesses manage their finances. There are four primary types of services provided by these firms: banking, securities, insurance and consumer finance. These services are vital to the health of any economy and the well-being of its citizens. As such, people who work in the finance industry can expect to see a high degree of job stability and growth.

Despite the wide array of jobs in this sector, many people have trouble determining which type of financial services they want to pursue. As a starting point, it is helpful to understand the four major categories of financial services. These include:

Banking is the foundation of the industry and encompasses handing deposits into checking and savings accounts as well as lending money to others. Banks earn revenue through fees, commissions and the spread of interest rates between loans and deposits. The banking industry also includes credit card networks and debt resolution services.

Investment services provide guidance and advice on investing in the stock market or real estate. These professionals may also assist with due diligence on business ventures or provide valuation services for businesses. Financial services companies that offer these services are often referred to as wealth management firms.

Insurance is a vital part of financial services and provides a safety net for individuals and families against the unforeseen. Its responsibilities include providing property and liability insurance as well as life, health and disability coverage. These services are offered by agents, brokers and underwriters.

Consumer finance is a subset of financial services that provides consumers with credit cards, car loans, home mortgages and personal lines of credit. These services are aimed at helping consumers build good credit and improve their overall financial picture.

As a final category, financial services include accounting and tax filing services, currency exchange and wire transfer services, and global payment providers such as Visa and MasterCard. These are also known as financial market utilities and provide the infrastructure for stock, derivative and commodity exchanges as well as payments systems like real-time gross settlement systems and interbank networks.

People working in the finance industry are generally very satisfied with their careers. This is partly because the salaries are competitive with other industries and the positions provide a solid career path that is relatively easy to get into. People who are interested in a career in the finance industry should begin by reading up on the sector, learning about the various positions and networking with people in the field. Additionally, it is wise to start a daily habit of reading reputable financial journals such as The Wall Street Journal and Barron’s. Some libraries even offer subscriptions to these journals for free. Once a person has a general understanding of the various roles within financial services, they should speak with their Pocketbook Agency representative to find the right position for them.