A healthy financial services sector is crucial to the world economy. It allows people to save and invest, obtain loans for homes, cars, education, or any number of other needs, safeguard their health and property through insurance, and more.
Yet, it’s an industry that can be difficult to understand. The variety of products and professionals within the sector often make it seem all-encompassing, but each type of financial service has its own unique role to play.
Banks offer checking and savings accounts, credit cards, mortgages, and other consumer loans. Securities firms handle stocks, bonds, and other investments for individual and institutional investors. Private equity funds and venture capital providers supply investment capital to companies in exchange for ownership stakes or profit participation. And, of course, insurance provides a way to hedge against the risk of death or disability, property loss or damage, and even lawsuits.
Each of these segments of the market is regulated by government agencies to ensure that consumers are protected, and that the market itself operates fairly. These regulations are intended to balance the need for consumers’ money and rights to be safe with the need to keep markets vibrant by allowing innovation.
The world of financial services also includes specialized services like debt resolution, global payment providers (such as Visa and MasterCard), and exchanges that facilitate stock, commodity, and derivative trades. These segments of the market are often less regulated than other parts of the finance sector, though they still must comply with certain rules and regulations to operate legally.
Financial services also include a wide range of support services. These can be as simple as providing a check guaranteed by the bank itself and prepaid by the customer, or as complex as underwriting and advising on mergers and acquisitions. There are also a number of specialized support services that help the general public, such as debt resolution or credit counseling companies and as well as investment management companies that manage assets on behalf of their clients.
A career in financial services can be lucrative and challenging, but it can also be stressful. The demands of the job often result in long hours, and finding a work-life balance may be challenging. Additionally, many roles in the field require a high level of analytical thinking and are very competitive. For these reasons, it is important to weigh the pros and cons of a career in financial services before diving in. However, a degree is not always necessary for those interested in working in this area of the industry. Some positions, such as entry-level customer service, can be achieved through training and on-the-job experience. Others, such as investment banking, require an undergraduate or graduate degree in a relevant subject. These positions often pay well, and they can be a great entry point into the financial services industry.