The Financial Services Sector
The financial services sector refers to the broader range of businesses that manage money, including banks, credit unions, insurance companies, accountancy companies, stock brokerages and investment funds. This includes many for-profit enterprises as well as some nonprofits.
The main components of a financial services sector in any country are the financial enterprise (banks), the financial markets and the payment system. The interaction of these three components enables the financing of consumption and investment.
Banks earn their revenue through the spread between interest rates charged for loans and deposits. Their services include taking deposits, issuing and remitting cash and cheques, lending and providing credit facilities. The other important service provided by these entities is the management of money.
This service is offered by large commercial banks and credit unions as well as community banks and some nonbanking financial institutions like savings and loan associations and cooperative credit unions. Some financial services firms also provide other ancillary services, such as credit card services and insurance products.
A variety of jobs in the financial services industry require a broad range of skills, from math and data analysis to communication and problem-solving. You also need to be willing to learn new concepts and work with others, both of which are key components of a successful career in the financial services industry.
There are several pros and cons to working in the financial services industry, but it is an extremely broad sector that touches everyone in big and small ways. Whether you’re interested in a high-paying job at a bank or you want to work for a nonprofit, there is a place for you in this sector.
Besides its wide ranging impact, financial services is an excellent place for those who wish to be part of an industry that encourages growth and development in its employees. Most of these firms are heavily invested in their employees and often promote from within, based on aptitude over tenure.
Another pro is that there are a number of different job roles in the financial services industry, and each one can offer a unique experience. From private equity to structured finance, and from asset management to wealth management, the financial services industry offers a range of opportunities for professionals who are eager to help their clients reach their goals.
The financial services sector is a major component of our national infrastructure and plays a vital role in our economy, so it is no surprise that this industry is so highly regulated and governed. In addition to preventing fraud and abuse, regulators also aim to ensure that the public is protected from financial risks and that they are treated fairly.
In the United States, there are thousands of professional firms in the financial services sector. These range from large commercial banks and credit unions to smaller community banks and even nonprofits, which often provide counseling services or money management advice.