Financial services are a broad sector of the economy that includes businesses involved in banking, credit card processing, investing and loans. They are important to the economy because they help consumers and companies manage their money and provide an essential service for a country’s economic growth. A strong financial services industry means more money is available to be spent on goods and services, creating jobs, which in turn leads to greater economic prosperity for a nation.
A variety of different industries make up the finance sector, but the major players include banks, credit-card companies, insurance companies, accounting firms and investment funds. Banks provide deposit-taking, lending of all types, financial leasing and payment services and also offer investment management and a wide range of other auxiliary financial services. Credit-card companies such as American Express and Visa are known for their credit card offerings that often come with rewards programs. Some of these are geared towards specific categories of spending such as travel, gas and restaurants or other perks like cash back. Investing firms such as Wells Fargo and Charles Schwab provide investment opportunities to individuals through stock brokerage services.
Insurance is an important part of the financial services sector and provides protection against loss or damage to property (e.g. car and homeowners insurance) or liability (e.g. life and health insurance). Private equity firms and venture capital providers provide investment capital to new businesses in exchange for ownership stakes or profit participation. Other auxiliary services include credit reference agencies and actuarial services.
Financial inclusion is the ability of a person to use financial services to improve their lives by increasing their incomes, savings and investment opportunities. Without access to financial services, people are limited in how they can earn a living, save, spend and borrow. Nearly 2 billion people worldwide lack financial inclusion, which can lead to poverty and instability. Financial services can help by providing loans for small businesses, increasing household incomes and allowing families to buy products and services that are otherwise out of their price range.
The financial services industry is incredibly diverse, and it is important for anyone interested in the field to research the different subsectors and segments that make up the entire market. Getting to know the different types of businesses within the industry will help an individual decide which area is best suited to their talents and interests.
One of the best ways to learn more about the financial services industry is by talking to professionals in the field. Many of these individuals are more than happy to share their knowledge with those who are serious about pursuing a career in the sector. Reading high-quality publications is also a great way to gain an understanding of the different sectors and how they relate to one another. The Wall Street Journal, Barron’s and Value Line are examples of excellent publications that cover a range of topics related to the finance industry. Pocketbook Agency is also a great resource for finding potential jobs in the financial services industry.
