Financial services is a large sector that encompasses the markets, products and institutions in a country related to the lending, investing and management of money. This includes all banking activities; deposit-taking, loan and investment management; credit intermediation, leasing companies, hire purchase and financial credit agencies; equity capital market services (including stock exchanges, debt and derivatives trading), fund management and all forms of financial and investment intermediation.
There are several different career paths within the financial industry. One common option is to start in an entry-level role and work your way up through the company, developing new skills each step of the way. Another option is to pursue a graduate degree in the field of finance, which can help you to gain valuable experience while studying. There are many benefits of working in the financial services industry, including a competitive salary and the potential to move up into the senior ranks quickly.
The industry is undergoing massive changes as technological advances make it easier to invest and manage money. This means that it’s more important than ever for businesses to understand how their customers use their products, as well as the issues that they face around debt and money management. In order to grow their customer base and improve commercial impact, companies must focus on providing innovative tools that can help their customers to get better control of their finances.
Traditionally, the banking sector was at the heart of the financial services industry. However, over the years consumers began to move away from banks, instead choosing other financial services providers like brokers and mutual funds companies. This led to consolidation in the industry and a blurring of the lines that used to separate the sectors.
In addition to banks and other depository financial institutions, the industry also includes the following:
Debt resolution services – Assistance in helping individuals who are in debt to recover some or all of their money. Debt management companies provide a similar service for businesses.
Securities research – Provides advice and research to investors on specific stocks and industries. Brokerage services – Buys and sells securities on behalf of clients, sometimes offering financial consulting as well. Prime brokerage – An exclusive type of bundled broker service that caters to high net worth individuals and hedge funds.
In addition, there are other auxiliary financial services such as reinsurance, payment systems and consolidated data processing. Finally, there are advisory and intermediation services that include credit reference and analysis, investment and portfolio advice and asset management. Increasingly, many of these services are being provided by a wide range of new players in the digital financial services space. This is changing the nature of competition and raising the stakes for established players in the industry. It is also driving progress towards financial inclusion, with millions of people who previously were unable to access formal financial services now getting accounts. This has a direct impact on their lives and the economy.