Financial services are a wide range of products and professionals that help individuals, businesses and the government manage their finances. They include banks, brokers, mortgage lenders and insurance companies.
A healthy financial services sector is essential to the health of an economy and it helps people save for home improvements, education, vehicles and more. It also helps them safeguard their property and assets with insurance.
The financial services industry is made up of a wide variety of professionals and firms, so there are plenty of opportunities to pursue a career in this area. Whether you’re interested in becoming a banker, a mortgage lender or a securities trader, there’s a job out there for you!
How Does It Work?
The financial service industry consists of thousands of depository institutions, providers of investment products, insurance companies and other credit and financing organizations. Its infrastructure includes stock exchanges, clearing houses, derivative and commodity exchanges and payment systems such as real-time gross settlement systems or interbank networks.
There are four main types of financial services: * Accept deposits and repayable funds; make loans; administer payment systems; and trade. Each requires different knowledge and abilities.
Banking and other finance services – Provides depositors with bank accounts, money market accounts, certificates of deposits, and savings and checking accounts. They also offer other financial products like mortgages, auto loans and personal and business loans. They accept deposits from customers and give loans, making a profit on the difference between what they pay out to borrowers and what they receive back from depositors.
Brokers and other brokerage services – Provides financial advisory services on behalf of clients, who pay for these services. They often specialize in a particular type of asset, such as stocks or foreign currency.
Mutual funds and other fund management services – Provides financial investors with access to money market and other funds, such as equities and bonds. They also provide advice to investors on how to invest their money and manage their portfolios.
Fintech – The rapidly expanding field of digital technology and software that provides financial services. These technologies are transforming how banks do business, creating new ways for consumers to interact with their bank and financial services provider.
Conglomerates – A type of financial services firm that is active in more than one sector, such as life insurance, general insurance, health insurance, asset management, retail banking and wholesale banking. These firms are generally less profitable than individual sectoral entities.
They may also have higher risk as a result of the fact that they operate in more than one sector. For example, an investment bank might be active in insurance, securities research, prime brokerage and private banking.
A conglomerate can be successful if it has good management, which can help it retain employees and attract new ones. It can also be successful if the company is able to grow by taking on more customers and offering more products. It can do this by combining different types of financial services in a single operation and by attracting private capital, which it can use to expand its operations.