The Financial Services Sector
The financial services sector is a broad category of businesses that provide services to manage money and exchange it with other people. These companies range from banks and hedge funds to small community banks and even nonprofits.
It is a diverse sector that impacts everyone in big and small ways, says Ryan Duitch, president and CEO of Arro, a financial analytics software company. It includes banking, investment management, insurance, and many other fields.
Some professionals who work in the financial services sector have careers that seem very obvious (bankers, real estate agents). But others may be more baffling, like PayPal employees who handle customer relations or dispute resolution.
One way to understand the financial services industry is to divide it into two parts: financial goods and financial services. A mortgage loan is a financial good, but everything that goes into it (insuring the loan, inspecting the home) is a financial service.
This distinction is important because it will help you determine whether a career in the financial services industry is right for you.
A bank is a financial service that handles a person’s or family’s money and makes sure it is protected from loss. You can get a checking account at a bank, or you can qualify for a loan to buy a car, build a house, or start a business.
Other organizations that deal with money are trust funds and stockbrokers. These groups typically buy and sell commodities, like coffee or oil, at a low price and then resell them at a higher rate.
These types of organizations also have investment managers, who try to find the best investments for their clients. These investment managers often have a degree in finance or a related field.
Some financial services organizations specialize in specific areas of the financial market, such as private equity or mergers and acquisitions. These companies develop complicated products for high net-worth individuals and institutions to meet their specific financial needs.
The financial services sector is a key driver of the economy and plays a major role in economic growth. The presence of the financial sector promotes production, saving, and investment, which in turn provides more jobs and income to society.
While the financial services sector is broad and varied, there are four basic job roles that most financial services professionals have in common. Those with these jobs typically enjoy an excellent pay grade, and they can be very rewarding.
A financial services career can be a great fit for those who are looking to work in a highly competitive environment or are seeking to build strong relationships with their clients. The industry is regulated by independent bodies, which oversee the professional sector and ensure that consumers are treated fairly.
Financial services workers are highly satisfied with their careers, rated averagely at 9.6 on the scale of 1 to 10. They enjoy benefits such as health insurance, retirement plans, and paid time off. It is also a growing sector, with 1.2 billion people now having access to financial accounts worldwide.