The financial services sector is the broad set of economic services that involve finance and are delivered by institutions that have a significant impact on the economy at a macroeconomic scale. These include commercial banks, credit unions, insurance companies, investment funds and a wide range of businesses engaged in financial intermediation. Financial services are critical for economic dynamism as they provide a framework to invest money, raise capital and facilitate consumption.
There are many career opportunities in the field of financial services. This is a highly competitive industry where you are likely to be paid well. The average starting salary for a job in this area is about PS45,000, but once you have established yourself it is possible to earn up to the high five figures. This is an area of work where the emphasis is on aptitude rather than tenure, so if you are quick-thinking and intelligent you can advance rapidly.
In addition to offering a variety of products and services, the financial services industry also manages debt and risk, and supports business growth. They act as a channel for the flow of cash between savers and borrowers, allowing people to invest in things like mortgages, mutual funds and equity shares. They are also responsible for providing reinsurance to insurers to mitigate their exposure to the risk of catastrophic loss.
Governments oversee and regulate the majority of the financial services sector to protect consumers and foster trust. They do this through licensing, regulation and supervision, which varies by country. This is why you need to be familiar with the laws of your jurisdiction before you can start working in this sector.
Despite the global nature of the financial services industry, some firms specialize in serving a niche market. These include family offices, which handle the investments of a single wealthy family or small group, as well as wealth management firms that serve high net worth individuals and families with complex needs. Other specialized services include private banking, which provides personal services including a safe deposit box and safe-keeping of valuables, as well as corporate services such as structuring debt and equity for mergers and acquisitions.
As the world moves towards a digital economy, financial services are increasingly going online as well. This has changed how people shop for mortgages, invest their money and access loans. However, it also means that more people are able to take control of their finances and make the best decisions for them as individual consumers. This has led to a rise in the number of self-directed investors who want to learn how to manage their own investments. This has increased the demand for financial services in areas such as stock brokerage and personal investment advisers. As a result, the traditional financial services industry is expanding and evolving to meet these new demands. It is also becoming more diversified as the lines between different types of services continue to blur. This is illustrated by the fact that some banks now offer a range of investment and commercial banking products alongside their mortgages, for example.