When it comes to career paths, the world of financial services offers a multitude of opportunities. The sector encompasses everything from investment banking to insurance to mutual funds. The financial services industry touches everyone in big and small ways—from individuals like you to large corporations, local banks, and even nonprofits. When this industry thrives, a country’s economy does well, but when it falters, so does the economy.
While many people think of only three types of financial services—banks, brokers and mortgage lenders—the industry actually encompasses much more. It includes Wall Street, but also small community banks and even nonprofits that provide counseling or money management advice. Moreover, financial services touch not just individual consumers but also small businesses, large companies and the government.
To fully understand the scope of this industry, it’s important to distinguish between financial services and financial goods. Financial services are a set of activities that involve the inflow and outflow of money, while financial goods are the final products that come from these activities. For example, an orange can be a consumer good (if you eat it), or it can be a capital good (if you sell it to a deli for making juice).
Banks are the core of the financial services industry. They act as intermediaries between savers and borrowers by collecting savings from depositors and lending them to borrowers. This enables them to offer various financial products such as checking accounts, credit cards, and loans. Banks also offer a variety of services such as money transfer, notary service, and ATM services.
In addition to banks, other financial services providers include investment agencies, stock market brokers, and credit-card issuers. These entities offer a wide range of financial services to their clients, including wealth management, asset allocation, and retirement planning. They also provide a variety of intermediate services such as payment and settlement systems, credit-card processing, and information technology services.
The financial services industry is a crucial part of any economy, as it provides the means for people to accomplish their economic goals. When this sector and a country’s economy are strong, consumers are confident and spend freely. However, when the financial services industry struggles, it can drag down a country’s economy and lead to recessions.
If you’re thinking of a career in financial services, it’s important to know the different options available to you. Some sectors within this industry require specific degrees, but others rely more on soft skills and interpersonal interactions. In addition, you should consider whether you want to work for a company that’s for-profit or not. As a result, you’ll want to determine what type of career path best fits your interests and skillset.
