A country’s economic position depends heavily on its financial services sector. It enables people to spend money on things they want, such as cars and houses, and it provides the capital needed for companies of all sizes to grow. A strong economy backed by stable financial services can create more jobs, improve living standards and encourage investment. However, if the financial services sector experiences trouble, the entire economy can suffer.
While many people understandably think of banks and investments firms when they hear the term “financial services,” there is actually much more to it than that. The vast majority of companies that offer consumer and business finance are part of the financial services industry, as are payment systems providers, insurance companies and those who manage assets.
One of the more well-known types of financial services is insurance, which is something almost everyone buys to protect their finances against large expenditures that may otherwise devastate their budgets. The most common kinds of insurance are health, car, home, and life insurance, though there are many others. There are also a number of financial services that help people start or expand small businesses. Some of these institutions include microfinance organizations, angel investors, venture capitalists and bank loans.
Another type of financial service is money management, which focuses on managing cash and risk. Providers in this industry help individuals invest their funds, usually for a fee. They can also help people diversify their portfolios and hedge against inflation. They do this by aggregating savings and redistributing risk among a pool of savers and borrowers. In addition, they can provide valuable information and guidance on investing and saving.
The financial services industry is regulated by independent agencies designed to oversee different aspects of the industry and ensure its transparency. These include the Financial Industry Regulatory Authority (FINRA) and the Office of the Comptroller of the Currency. In addition, the industry is highly competitive, so there are a number of private companies that focus on specific niches within the market.
In most cases, the best way to break into a career in financial services is to use your connections to land an entry-level job with a reputable company. These entry-level positions will usually provide you with extensive training and mentoring, helping you to build the skills and confidence to advance up the ladder quickly.
It is important to note that many financial services jobs are cyclical, meaning that they can be very profitable when the economy is healthy but have the potential to see a significant drop in revenue during times of economic uncertainty. This means that even if you are working in a senior role, you cannot guarantee your job security.
A good way to get ahead in the financial services industry is to stay up-to-date with new technology and trends. Fortunately, many employers in this field are known for promoting from within based on aptitude and not just tenure. Additionally, with new tools introduced to the market seemingly on a daily basis, it’s important to continually learn and stay updated.