If you’re looking for a lucrative career path, the finance industry may be the right field for you. But the wide range of jobs in this sector can make it challenging to determine what type of role is best for you. Thankfully, Pocketbook Agency is here to help you navigate the world of financial services.
The Financial Services Sector
Financial services are everything that deals with money, from banking and credit to investment and insurance. They also include the services that support these functions, such as debt resolution and global payment providers. The sector is an important component of the economy, influencing both companies and consumers. A strong financial services sector can boost economic growth and create more jobs. In contrast, a weak financial sector can slow down the economy and lead to a recession or depression.
The financial services sector consists of thousands of depository institutions, credit-granting organizations and other financial utilities, such as debt management and investment funds. This group also includes specialized firms that offer services like accounting, tax filing and currency exchange. Financial services also encompasses credit card networks and providers, global payment systems, such as Visa and MasterCard, and stock and commodity exchanges. In addition, it includes private equity and venture capital companies that invest in small and medium-sized businesses in exchange for ownership stakes or profit participation.
A healthy financial services sector is critical to the economy, as it helps people get loans for homes and cars, provides ways for people to save for retirement and other goals, and safeguards property and health through insurance. It’s also a major employer, providing millions of people with well-paying jobs. However, many people still lack access to these essential services, despite great strides being made toward financial inclusion.
Financial services have a significant impact on individuals, and the industry is incredibly complex. To make sense of it all, you need to know the different subsectors within this sector and what each offers. To start, here’s a look at four of the most prominent subsectors within financial services:
Investment Financial Services
This sector includes investment banks, hedge funds and asset managers. It also includes firms that advise companies on mergers and acquisitions, valuation and risk assessment. Many of these firms are multinational in nature, and they can vary in size from small domestic consulting companies to large global conglomerates.
Insurance Financial Services
This sector encompasses both life and property insurance policies, as well as other kinds of specialty coverage such as business interruption and personal accident. Insurance companies can provide these products individually or through third-party providers. In addition, this sector includes reinsurers that sell reinsurance to insurers to protect them against catastrophic losses.
Banking is a critical component of the financial services sector. This is because it provides the foundation for most other activities, including lending, investing and saving. Traditionally, banks have served this function by offering deposit and withdrawal services. However, modern banks now offer a much wider range of products and services. For example, some banks now offer checking and savings accounts, debit cards, mortgages and even mobile payments.