Financial services are the sector of the economy that deals in money and credit. It includes everything from banks, credit unions, and savings institutions to investment firms, insurance companies, and mortgage brokers. The industry is one of the largest and most influential in the world, and it’s comprised of large conglomerates as well as a number of smaller, niche players.
The financial services industry is all about putting money to work. Rather than stashing their cash under the mattress, consumers give it to intermediaries who might invest it in the next great technology or allow them to buy a car or a house. The financial services industry also includes those companies that provide critical financial utilities, such as payment systems (like credit cards and bank transfers), securities research, broker services, prime brokerage, and even money remittance services.
Providing these vital utilities helps make the financial services industry one of the largest and most important in the world. The industry is made up of thousands of depository institutions, providers of investment products, insurers, credit-card issuers, and providers of debt financing. The industry also includes private equity funds, venture capital providers, and angel investors, which supply investment capital to promising startups in exchange for ownership stakes or profit participation.
Financial services also include the activities performed by central banks and other monetary authorities to control the amount of money in the economy and manage inflation. This is done through adjusting interest rates, participating in the money market, and buying and selling government securities, among other things.
The other big part of the financial services industry is composed of firms that provide personal finance products and services to individuals, including wealth management, retirement planning, and investment advisory services. Those firms typically offer these services to high-net-worth clients, such as wealthy families and individuals.
For those seeking a career in financial services, the pay isn’t spectacular, but it is competitive and there is room for advancement based on merit. It’s also a highly collaborative industry, and many firms place a premium on training new hires. In addition, many firms are known for promoting from within, as they place a heavy emphasis on aptitude over tenure.
While a career in the financial services industry may seem like a sure thing, it’s important to consider what role you want to play and how that might fit into your overall career plans. Duitch notes that while the industry encompasses “everything that touches money,” not all roles in this field are created equal. For example, if you aspire to become an investment banker, working as a teller at a community bank is unlikely to help you achieve your goals. Still, there are plenty of other opportunities to choose from in this booming and constantly evolving industry.