Financial services are the professional firms that handle money and assets for individuals, small businesses, large companies, and even the government. This sector is important because it helps a nation’s economy thrive by allowing people to make larger purchases and save for the future. It also protects people’s health and wealth by providing insurance coverage. It’s no wonder that the state of the financial services industry is so closely tied to a country’s overall economy.
Most of us think of banks, stock brokers and mortgage lenders when we hear the term “financial services.” But those are just a few of the many sub-sectors that comprise this large industry. For example, credit-card companies, actuaries, insurance agents and financial planners are all part of the financial services industry too.
The earliest financial services were probably life insurance policies and banking, which are both still a major part of this industry. Life insurance guarantees that the family of a deceased person will receive a specified sum of money upon their death, while banking services provide a place for people to store and easily access their funds.
Banks accept deposits from individuals and businesses and then loan that money to others for a variety of purposes, such as purchasing a home or starting a business. These loans are typically backed by the government through the Federal Deposit Insurance Corporation.
Some financial institutions offer investment services, which include managing a client’s investments and advising them on how to grow their wealth. These institutions may also sell investment products, such as mutual funds and securities, to clients. Others may specialize in providing debt or equity financing to help companies and governments raise money for their projects.
Another type of financial service is treasury management, which involves managing a company’s cash and preparing it for payments. This type of service is often provided by investment banks and large corporations. Some companies in the financial services industry also provide credit-card processing, payment systems, and other related services. Many of these companies are very large and have a global presence, but some are much smaller and focus on local markets. Regardless of size, most companies in the finance industry are expected to follow strict regulatory guidelines to ensure that customers’ money is safe and that they don’t abuse their power. This industry is a vital part of any economy, and those who work in this field must be intelligent, quick-thinking and team players. A career in this field can be very rewarding, especially when you consider that it provides a good salary and opportunities for advancement.