Financial services put money to productive use by providing mechanisms for saving and investing, as well as facilitating the redistribution of wealth, and by helping individuals and businesses manage risk. The sector encompasses all activities involved in the management of money, including depository services; lending of all types; financial leasing; credit reference and reporting services; actuarial and risk assessment services; advisory and intermediation services (including advising on acquisitions, investment and portfolio management, and debt and equity capital markets) and other auxiliary financial services.
A crucial element in financial services is trust, whether it is between savers and the institutions they entrust their savings to, or between brokers and the customers they connect with through their products. For example, purchasers of life insurance expect that their heirs will receive the payout promised them by their policy, and banks depend on the faith of depositors and borrowers to continue offering credit. The financial services industry therefore relies on strong regulation to maintain this trust.
Across the globe, the financial services sector continues to expand and evolve, with more companies competing for customers. This is particularly true in the United States where new technologies have fueled competition and disruption. New players are reshaping the industry by developing innovative tools and services to help people manage their money better, from making it easier to invest and save, to tracking spending and improving creditworthiness.
While these trends may be challenging for established players, there are also opportunities to improve customer retention and acquire new customers. This can be achieved through the provision of more personalized, digitally-enabled, and cost-effective solutions that allow customers to make informed financial decisions. Additionally, understanding the key moments in a customer’s lifecycle can allow banks to anticipate their needs and offer products and services at just the right time.
In addition to improving the lives of consumers, the financial services industry helps nations grow by increasing investment and economic activity, thereby encouraging productivity and creating jobs. This is achieved by promoting and supporting investment, savings, and production in all sectors of the economy. The industry consists of thousands of depository institutions, providers of investment products, insurance companies, and creditors and lenders.
The financial services industry is comprised of several different segments, each with its own unique career path and requirements. For those interested in entering the field, it is important to research each segment’s offerings to find the best fit. While the pay may not be vast, many positions in this sector offer competitive salaries that can be very rewarding. In addition, a variety of benefits are offered to employees, such as health insurance and retirement plans.