The financial services industry encompasses a wide range of services that companies and individuals use to manage money. This includes banks, credit unions, stockbrokers, mortgage lenders and investment firms. The financial services industry is important to the economy because it provides capital that allows businesses to invest in themselves and expand, and it also helps individuals with managing their money. A healthy financial services sector is a vital component of any economy, and when it thrives, it boosts consumer confidence and purchasing power.
In addition to providing capital, the financial services industry offers various other important services. These include facilitating payments and settlements, which involves processing electronic fund transfers and issuing credit cards. They also provide risk management by providing insurance products, such as health and property insurance. Finally, they assist individuals with making sound financial decisions by offering advice and guidance.
While it may seem that the financial services industry is all-encompassing, it was not always this way. Before the 1970s, each sector of the industry remained largely distinct from the others. Banks offered checking and savings accounts, loan associations provided mortgages and personal loans, and brokerage firms gave consumers investment opportunities in stocks, bonds and mutual funds. Credit card companies, like MasterCard and Visa, only issued credit cards.
Today, the financial services industry is much more consolidated, with many companies operating across multiple sectors. This consolidation has helped to drive greater efficiency in the sector, which has resulted in lower costs and higher profits. Moreover, it has led to the creation of new jobs, especially in technology and innovation positions. The introduction of new technologies and globalized markets has also changed the financial services industry, giving it a broader scope that extends beyond banking and securities.
Some of the most popular careers within the finance industry are in banking, insurance and asset management. These career paths are highly lucrative and offer employees a wide variety of opportunities to advance their skills. The job market for these careers is competitive, but with hard work and the right attitude, it is possible to make a name for yourself in this field.
There are many other areas of the financial services industry that can be a good fit for individuals who want to pursue a challenging and rewarding career. These areas include:
The tertiary sector of the economy grows at an exponential rate in a well-developed country and it is the financial services industry that makes this growth possible. The growth of the tertiary sector is reflected in the increase in consumption and it is the financial services industry that enables consumers to acquire the necessary goods and services to meet their needs. This is made possible by hire purchase, leasing and housing finance companies which allow consumers to buy the things they need without spending all their cash. This in turn creates more demand for the goods and services produced by manufacturers which leads to economic growth. This cycle of demand, supply and production is a major driving force behind economic development.