The financial services industry is an essential part of the economy, supporting the flow of money and the purchase of goods and services. Its importance is recognized by the many government regulatory agencies that oversee it. In fact, the industry has been a target of several allegations of improper behavior by banks. As a result, increased regulation has been implemented.
Financial services include a wide variety of products and services. These include banking, investment management, and insurance. Some financial services are for-profit, while others are nonprofits. While not all types of financial institutions are profitable, all provide some benefit to the economy. This includes the creation of more demand for goods and services.
Financial service providers also help raise funds for companies, making loans and selling securities. They earn revenue through interest rates and fees. For example, commercial banks accept deposits from customers and underwrite debt for the private sector. Investment banks focus on raising capital for businesses by offering mergers and acquisitions. There are also specialized financial firms such as structured finance that develop sophisticated products for high net worth individuals.
One of the most important financial services is insurance. Insurance companies protect people against natural disasters, business risks, and other unexpected expenses. Insurance can be purchased directly from the company, or through an agency, like a life insurance agent. Other forms of insurance include health insurance, casualty insurance, and property insurance.
Another type of service is the mortgage. A mortgage loan may seem like a service, but it is a product. Banks offer various types of loans. Credit unions and community banks provide banking services.
There are also many community-based nonprofit organizations that provide money management and counseling services. Although the financial services industry has been affected by the global COVID-19 pandemic, the stock market has bounced back. Therefore, there is promise for the future of the industry.
Another area that has changed drastically is technology. The financial services industry is highly dependent on IT systems to carry out its functions. Consequently, many of its operations have become virtually automated.
Fortunately, however, the financial services industry has a plethora of job options. While not every type of financial services job will lead to career advancement, if you have the right skills and experience, you should be able to find a good position. Most financial services jobs require a mix of hard and soft skills. Many positions in the industry involve 16 to 20 hours of work per week. However, with the rise of digital gig work, the industry’s customer volume has grown by $204 billion in 2018.
If you’re interested in a career in the financial services industry, you’ll have to think about your skills and interests, and decide if a degree is the best way to move forward. Often, a job in the financial services industry will be subject to certain regulations, and you might not have the time or flexibility to take on a traditional work schedule.