Financial services are the cornerstone of a healthy economy, enabling people to buy houses and cars, fund education and other costs, and manage risk. They also help businesses expand and grow. But without a strong, stable financial services sector, a society could become indebted and stagnant. This article outlines four types of financial services that are essential to a functioning economy:
Banking services
Banks provide a wide range of financial services, including accepting deposits and lending money to businesses and individuals. They may also provide credit card services, issue corporate checks (like cashier’s or certified cheques) and administer payment systems. In addition, they provide financial advice and invest funds on behalf of their customers. They may also take on debt and equity capital for companies wishing to raise funds.
Insurance services
The insurance industry is one of the most important of all financial services. It is a safety net for those who cannot afford to pay for expensive events, such as health care or the loss of property. This sector includes life, car, home and other types of insurance. In addition, it covers other related services like reinsurance, pensions, annuities, and mutual funds.
Securities services
Providing investment services, brokerage, and underwriting for stocks, bonds, derivatives, and other assets, securities services are a vital part of the financial industry. This sector also provides research and analysis to investors and corporations. Investment banks underwrite and execute debt and equity securities for companies seeking to raise capital or merge with other firms. Private equity funds and venture capital providers are also a part of this sector.
Other services
Other financial service sectors include investment management, tax preparation, and global payment services. These sectors are regulated to ensure the safety of investor and customer assets, as well as market liquidity and stability. These services are provided by many different companies, from small local consulting firms to huge multinational corporations. The career opportunities for those interested in these areas are immense. Those working in the financial services industry often must meet stringent compliance measures, and they are usually required to take out professional liability insurance (errors and omissions) and continue to renew it throughout their careers. They must also continually upgrade their skills and knowledge to keep abreast of the latest industry trends and changes. In addition to this, many employees in this industry are paid on a commission basis, meaning that their income is directly linked to how much work they do and the number of clients they can attract. This can lead to high levels of stress, as they must constantly strive to meet targets and quotas. In addition, a high level of performance can lead to increased salary and benefits. However, the good news is that more and more employers are offering flexible working policies in order to attract talent. This is especially common for roles such as mortgage brokers, who can typically work from home. As a result, this allows them to have a better work-life balance.