Financial services are a powerful economic force that help individuals and businesses manage risk, save for the future, make investments and more. These industries also set the standards, practices and operations that all other business sectors use for their own purposes. In short, the financial services industry is a key driver of other industries’ success, and its failure to function properly can bring about economic turmoil that leads to recessions and depressions.
People who want to work in the financial services industry have a few options for getting started. Some start their careers in one of the many subsectors that form the industry and gradually move up to a leadership role within their chosen sector, while others take an entry-level position and learn the industry from the ground up. Whatever option you choose, you should know that this is a highly competitive field, and it requires smart, quick-thinking people who are good team players and can handle stress well.
While the world of financial services seems complicated and confusing, it is actually quite straightforward. The financial services industry includes all of the institutions and individuals that provide a wide range of products and services related to money management. This includes banks, credit unions, mortgage lenders, brokers, stock and mutual funds companies, and insurance providers. It also includes Wall Street and other large investment firms.
The main components of financial services are intermediation (channeling cash from savers to borrowers) and the provision of critical financial utilities such as securities markets, payment systems, depository institutions, commodity and derivative exchanges and clearing houses. Financial intermediation helps to reduce risk by spreading it among many investors, and it allows borrowers to get the cash they need quickly without having to sell assets that might have appreciated in value.
A strong financial services industry helps people and businesses make big purchases, and it can lead to a thriving economy that provides more jobs. The opposite is true of a weak financial services industry, which can pull down the entire economy and lead to recessions and depressions. In addition, a financial meltdown can make it hard for people to save or invest for the future, and it can lead to higher unemployment, a drop in wages, lower incomes and a slowdown in economic growth.
Financial services are essential for the economy, but they are also complex and require the skills of a very qualified workforce. The future looks promising for those who want to work in this lucrative industry, although it is important for people interested in working in the field to have a solid understanding of how the economy works and which sectors are most likely to offer the best opportunities. In addition, it is helpful for people to network with those who are already in the industry in order to increase their chances of landing a job. This is especially important for those who are looking to become investment portfolio managers or financial advisors.