The financial services industry is an important part of any economy. It includes activities such as lending money, investing funds and providing debt financing for businesses. It is also important for individuals, as it allows them to save and invest for their futures. These activities are vital for the overall health of a country’s economy. Financial services also provide a wide range of insurance products, such as life and property coverage.
The global financial services industry is highly competitive and constantly changing. This is due to a number of factors, including the 2008 economic crisis, changes in regulatory requirements and new technological advancements. However, it is still an excellent industry to work in, as the career opportunities are vast and varied.
Getting into the field of financial services is fairly straightforward. Many financial services companies offer on-the-job training and mentoring programs, which can help you gain experience and knowledge quickly. In addition, many firms promote from within based on performance and aptitude, rather than seniority. This can make it a great place to start your career, especially for younger people.
To get into the industry, it is important to read up on the different areas of finance. A great way to do this is by subscribing to a business magazine, such as The Wall Street Journal or Barron’s. It’s also a good idea to explore job shadowing or internship programs, as these can help you bridge the gap between theory and practice.
Once you have a clear understanding of the basics, it’s time to start focusing on your specific area of interest. Some of the most popular areas of financial services include:
Banks – Provide deposit and loan services to individuals and businesses. Essentially, they collect deposits from people who have money to lend to those who need it. They evaluate the creditworthiness of borrowers and determine their interest rates. They also provide cash management services, such as prepaid cards and check guaranteeing services.
Investment banks – Provide brokerage services and advisory services for both corporate and private clients. They sell investment products, such as stocks, bonds and mutual funds and they may advise on mergers and acquisitions. They also offer structured finance, which involves creating more intricate (derivative) products for high net worth individuals and institutions.
Debt resolution services – Provide a way for individuals and businesses to resolve debt, often by paying less than what is owed. These services can be provided by either government-owned or privately run organizations.
Insurance – Ensures that individuals are covered for risks, such as death, illness and property loss. This can be done through life, disability and property insurance. Other types of insurance include reinsurance, which is bought by insurers to cover some of their own risks. This is a very profitable industry, as it provides peace of mind to customers and can reduce their risk exposure.