Financial services is a broad sector that covers the making, investment and management of money for people and organisations. This includes the banking industry, credit unions, stock brokerages and other companies involved in finance. It also encompasses insurance, risk redistribution and wealth management.
It is an important aspect of the economy. It helps businesses to get the funds they need to expand and grow. It is also a barometer of the economic health of a nation. If there is a lot of activity in the capital market, it indicates that there is a healthy economy.
A career in this field can be exciting, rewarding and highly lucrative. It requires a range of different skills and there are a number of specialisations that you can choose to pursue. Whether you want to work in the highly charged and competitive environment of institutional dealing or whether you prefer to build relationships with clients, this industry can provide a great opportunity.
The most obvious part of the financial services industry is the banks. These are the institutions that handle the deposits and savings of the general public as well as lending money to people and businesses. They make a profit by charging interest on the loans that they make and the money that is deposited with them.
Other financial service providers include private equity and venture capital firms, which supply investment capital to new companies in exchange for a stake in those companies or a cut of the profits. The insurance sector of the industry provides protection against the death or disablement of a person (life, disability and health insurance) as well as against property loss or damage (homeowners’ and car insurance).
Lastly, the investment services of the financial services industry offer advice and capital to investors in the form of stocks and bonds. This sector of the industry is regulated by government bodies to protect investors from fraudulent activities.
Another area of the financial services industry is payment systems, which allow the transfer of money from one party to another. These are often provided by banks, but can also be provided by non-banking entities such as credit card companies and PayPal. This is an important part of the economy as it allows people to shop online, send money abroad and transfer money between accounts. It also supports the growth of the retail sector as well as other sectors such as tourism and hospitality. It is essential to have a fully functioning and robust financial services industry in order for the economy to thrive. Without it, the country would stagnate and be unable to provide jobs for its citizens.
