Financial services is a broad industry that encompasses banks, credit unions, insurance agencies, mortgage lenders and investment firms. Financial services are defined as “everything that touches money.” They are a vital part of the economy and provide services to individuals, businesses and the government. While people often associate the financial services sector with Wall Street and large companies, the industry also includes small business owners, nonprofits and even individual investors.
As the economy has evolved, so have the types of financial services available. New innovations have allowed the financial services industry to expand beyond traditional brick-and-mortar locations and into a more virtual world. However, this has not come without challenges for many established firms. For one, the speed of technology development has outpaced government regulations, making it challenging to integrate the latest digital features and apps into existing products. Additionally, customer sentiment and demand are moving faster than the ability of some banking institutions to keep up.
Some of the most common types of financial services include insurance, payment systems and wealth management. Insurance is a type of financial service that covers the cost of unexpected expenses, such as a hospital bill or a home repair. It is typically paid for by a monthly or annual premium that the insured pays to a company.
Payment systems are a category of financial services that allow users to transfer funds electronically or through checks. These systems are used to pay for goods and services, including utilities, loans and debt repayments. One of the most popular payment systems is a credit card.
Investment services are another category of financial services that involves the buying and selling of securities, such as stocks, bonds, mutual funds and other assets. Investment services are provided by brokerage firms, investment banks and private equity funds.
Financial institutions are regulated by the government to ensure they follow ethical standards and protect the interests of their customers. These institutions may offer a variety of services, such as deposit-taking; lending of all types; financial leasing; securities trading; asset management; and other related services.
The history of the financial services industry goes back hundreds of years. In the modern era, the industry is highly dependent on technological innovation. However, the industry continues to face several challenges, such as a lack of transparency and increased competition from emerging players.
Careers in the financial services industry are lucrative and varied. The average entry-level salary is PS45,000, and the chance to progress quickly up the ladder is high. For those interested in a career in this field, it is important to network and build relationships with industry professionals.
A degree is necessary for most positions within the financial services industry, but it is not a prerequisite to start working in the industry. In fact, many careers in the financial services industry start at an entry-level position and learn on the job. For example, a bank may hire interns who will work on projects in different areas of the bank and then promote them to junior roles as they show their skills.