The health of the financial services industry is critical to a nation’s economy. When this sector is strong, consumers spend more money, which helps businesses of all sizes and leads to higher overall economic growth. Conversely, when the financial services sector falters, the entire economy suffers.
As a result, it’s important for people to have a good understanding of the industry and the many career opportunities that are available within it. Whether you are interested in working for a large investment bank or simply want to be able to talk intelligently about money management with your friends and family, it’s vital to understand what makes up the financial services sector and how different areas of it work together to create the industry as a whole.
Ultimately, the financial services sector is made up of all the ways that individuals and businesses obtain financial goods. This includes payment processing providers (those who allow you to make purchases using credit cards or bank drafts such as checks), financial institutions that accept deposits and extend loans, and firms that provide financial advice or manage assets on behalf of clients. The latter include investment advisors, who help you allocate your savings and/or investments to meet specific financial goals, as well as wealth management firms that handle the assets of a small group of wealthy individuals or families.
Financial services also include the means by which governments raise money to cover their spending requirements. This is done through the securities market, where government debt and equity shares are sold to investors. The financial services sector is also responsible for ensuring that the primary, secondary and tertiary sectors of a country’s economy receive adequate funding to continue growing, which is essential for job creation.
Because of the importance of the financial services sector to a country’s economy, it’s no surprise that this is one of the most heavily regulated industries in the world. However, even with all this regulation in place, there’s still a lot of room for innovation and creative solutions that can improve the efficiency and reliability of the industry as a whole.
While it is true that there are thousands of different jobs available in the financial services industry, not all of them will pave the way to a lucrative career in this field. It’s important to research each individual position and decide if it fits in with your long-term career goals. For example, if you are aiming to become a hedge fund manager, working as a teller at your local bank probably won’t get you very far!
For those who are interested in a more traditional path, the banking industry is where the majority of the financial services industry jobs are located. Commercial banks offer the same basic services as consumer banks, such as accepting deposits and extending loans, but they also focus on providing business accounts and other commercial banking products like asset management and cash management. Private equity and venture capital firms supply investment capital to companies in return for an ownership stake or a share of the company’s profits, which is often called “angel financing.” Banks and other financial institutions also offer insurance services, which protect against loss of income due to death or disability, or against property damage or theft.