Financial services are the companies or institutions that provide the infrastructure and tools to enable individuals and businesses to invest in production, savings and consumption. These include banks, credit unions, insurance companies, investment funds and diversified financial companies. The strength of the financial sector is crucial to a nation’s economy because it allows the free flow of capital and liquidity in the marketplace, which helps stimulate economic growth.
When people think of the term “financial services,” they often automatically think of banking. But there is much more to this industry than that. Even something like a mortgage loan is a kind of financial service. The property that you purchase is a good, and all the work that goes into supporting that transaction (getting a mortgage, getting an appraisal) is also a financial service.
Banks are the foundation of the financial services group, but it also encompasses everything from investing to the redistribution of risk. Companies in this field are often heavily regulated, with independent agencies designated to oversee the operations of different financial institutions and uphold transparency. The price-to-book and price-to-earnings ratios are common metrics used to evaluate a company in this sector.
While working in this industry can be stressful, it can also be very rewarding. This is especially true for those who are excellent communicators, because the vast majority of roles in this industry require strong interpersonal skills. Furthermore, many financial services companies are known for promoting from within based on merit rather than tenure.