Financial services are the institutions, products and services that enable individuals to save and invest, and protect themselves against risk. They are essential to an economy, as they provide the bridge between those with money to invest and those who need it to buy goods and services. In addition, they foster trust between providers and consumers. This is why they are heavily regulated, with varying degrees of oversight by government agencies across countries.
The major providers of financial services are banks; deposit-taking companies (including building societies and mortgage banks) and credit unions; and firms engaged in financial intermediation, such as investment firms, credit-card companies, leasing companies and hire purchase companies. Other important providers of financial services are credit-rating agencies; debt resolution companies (helping people with outstanding bills pay less than they owe); and financial market utilities, such as stock exchanges and clearing houses, derivatives and commodity exchanges and payment systems.
As the world’s economic power shifts toward emerging markets, companies in financial services are adapting to meet the changing needs of their customers. They are focusing on new ways to help people manage their money and build wealth, such as providing mobile apps that track spending habits and recommend savings goals. They are also expanding into digital banking, where they can reach a much larger audience than traditional branches.
For those considering a career in finance, it’s worth remembering that this sector is highly customer-driven and relies on a high level of trust between customers and providers. But it is also a highly lucrative industry, with some of the best salaries in the professional services sector.