The financial services industry encompasses a wide variety of businesses and professionals. Many people think of banks, brokers and mortgage lenders as distinct entities, but they all fall under the umbrella term “financial services.” In addition to those sectors, it also includes financial market utilities (such as stock, derivative and commodity exchanges), credit card networks and payment systems, debt resolution companies, accountants, and investment portfolio managers.
The most well-known type of financial service is insurance. Individuals buy health, car, property and life insurance policies to protect against unforeseen losses. In addition to providing security, these products can help individuals and businesses manage risk more effectively. Insurance agents and brokers are involved in this sector, as are reinsurers.
Banks are financial services companies that provide deposit products, such as checking and savings accounts, and lending products, such as personal loans, mortgages and business lines of credit. In this role, they act as intermediaries between savers and borrowers and assess the creditworthiness of potential borrowers. Banks are regulated by governments to ensure their safety and soundness.
Other members of the financial services industry include securities trading firms, investment agencies and money market brokers, among others. They all offer intermediate services such as investing and advising clients on financial strategy, assisting with mergers and acquisitions, and providing data processing and related software. Financial services companies also operate as investment management and trust companies, which offer custody, custodial and trustee services for securities and other assets, as well as asset servicing, including clearing and settlement for securities transactions.
Many of these companies are global, and the industry is highly competitive. It is essential for financial services companies to constantly innovate to meet the needs of customers, as well as regulatory requirements. This can be challenging for incumbents, especially when new players enter the market with different strengths, weaknesses, opportunities and risks.
Despite the challenges, there are many reasons to consider a career in financial services. This industry is integral to the economy and can have a positive impact on both businesses and consumers. For example, when the banking sector is strong, it can boost consumer confidence and purchasing power. Conversely, a weak banking sector can lead to economic instability.
If you’re interested in working in financial services, it’s important to do your research and know what types of roles are available to you. Depending on your area of focus, you may need specific certifications or education, but if you’re willing to invest the time in learning, there are plenty of resources online. Additionally, many companies in the sector encourage their employees to continue their education and provide on-the-job training.
At Phyton Talent Advisors, we work with professionals in the financial services sector on a daily basis and can attest to the fact that it’s an incredibly fulfilling career choice. To find out more about how you can start or advance your career in this lucrative field, contact us today.