A healthy financial services sector helps individuals to secure loans for mortgages, education and vehicles, safeguards their property through insurance policies, and allows businesses to expand by providing credit. But it also includes a broad range of professional firms that serve all sorts of clients, from consumers to large corporations, and the technology that underpins their operations. Whether you’re interested in a job within this industry or just curious about the massive financial services world, it’s important to understand what the different types of financial services are and who provides them.
The four main categories of financial services are money management, investment brokerage, debt resolution, and credit card processing. These categories encompass a wide array of professionals and products that most people will use at some point in their lives, even if they don’t work directly in the sector. These include banks, credit unions, credit-card companies, credit-card networks, payment processors, and global exchanges that facilitate stock, derivative, and commodity trades.
Most of us are familiar with banking services, which include checking and savings accounts, loans, credit-card offers, and other retail financial products. In addition, we may have used investment or brokerage services, deposited money into a retirement account or mutual fund, or perhaps arranged a mortgage or car loan. Financial services are a vital part of the economy and can be highly profitable for those who manage them well.
In the United States, there are more than 5,000 depository institutions (banks), providers of investment products and securities, insurance companies, credit-card issuers and networks, and other credit and financing organizations. The industry serves millions of customers, both individual and business, and is a critical driver of economic activity and standardization.
There are a variety of jobs available in financial services, and some positions require a specific degree while others are more dependent on interpersonal skills. Many of these roles are extremely high stress, as the world of finance is constantly changing and it’s not unusual for those in certain roles to work long hours. In these situations, it’s essential to find a balance between career satisfaction and work-life integration.
The types of financial services offered by a company are often dictated by the laws of the country in which they operate. A company that is active in multiple sectors of the market, such as a bank that owns an insurance company and a brokerage firm, must have specialized licenses for each of these areas to operate legally. There are, however, some exceptions to this rule, and a company can be legally operating as a conglomerate without having to obtain individual licenses for each of its distinct divisions. This practice is especially common in the United States, but other countries have different rules and regulations governing these kinds of structures. In these cases, it’s important to understand what these rules and regulations are before entering the field of financial services.