The financial services industry is a massively important one. This sector essentially controls the flow of money and credit in a country. When it is strong, this usually leads to a healthy economy and people being able to make large purchases and save money for the future. However, if the industry collapses, it can lead to a recession or even depression in the country. For this reason, it is critical that the industry be regulated and kept in check by government agencies. The recent market collapse in 2008 has shown the importance of this and will probably lead to increased regulation.
This industry includes a wide variety of jobs, from investment banking to accounting. It also encompasses things like wealth management, insurance, and mortgage broking. Many different types of career paths are possible in this field, and it is easy to see how someone with a particular passion could easily find the right place for themselves within this huge industry.
One of the main things that separates this industry from other business sectors is that it is highly interconnected. For instance, an investment bank will often work with a company that is in the insurance industry, which in turn may work with a stockbroker. This is why it can be so difficult to pin down what exactly financial services is.
Because of this, there are several different sub-sectors within the industry. A few of the most notable include:
Investment banking – These companies offer advice on mergers and acquisitions to clients, as well as acting as brokers for stocks, bonds, and other assets. Private equity – These firms invest capital in private companies, typically in exchange for a stake or profit share. Venture capital – These investors supply funding for start-ups, normally in exchange for a share of the profits or ownership of the company.
Commercial banks – These companies offer banking services, such as deposit taking, loan making, and payment systems. They also operate as insurers, credit unions, and savings and loans associations.
Credit-card companies – These businesses offer credit cards to individuals, as well as other products and services like travel insurance. The success of this industry depends heavily on the reputation of its brands, as well as the trust that consumers have in them.
Some of the other big players in this industry are private equity and hedge funds. These companies provide financing for a variety of projects, from small start-ups to major multinational corporations. The success of these companies relies on the ability of them to forecast and predict risks, which can be a difficult task. In addition to this, they also need to be able to manage their portfolios efficiently in order to maximize their returns. This type of finance is particularly useful for large-scale investments, such as a new factory. Developing nations are also starting to utilize this type of finance to allow them to afford basic needs such as sanitation systems. This can help to alleviate poverty in some areas of the world, where two billion people lack access to clean drinking water.
