Financial services are a key factor in an economy’s growth. They enable companies to obtain the money they need to boost production and make more profits in the long run.
The industry provides a variety of products and services that range from accounting to insurance to investment. It is one of the largest in the world and is home to some of the biggest names in business such as Berkshire Hathaway, American Express and Wells Fargo.
A career in the financial services field offers many benefits including a high salary, good health insurance and a flexible lifestyle. There is also a wide range of employment opportunities and the sector has a high reputation for promoting people based on merit.
Banking, investing and credit cards are among the main financial services provided by this industry. In addition, insurance providers help customers protect their assets and minimize risks.
Definitions of financial services vary from country to country. In the United States, they include deposit-taking institutions such as banks, building societies and mortgage banks; credit unions and credit cooperatives; insurance and pension funds; general financiers; cash management firms; and all other forms of financial intermediation and asset management.
Providers of financial services are able to channel cash from savers to borrowers and redistribute risk to keep it manageable for individual members, while providing investors with greater returns than they would have earned on their own. For example, commercial banks lend money to businesses to generate higher rates of return than they pay for their deposits, while insurance companies pool cash that is used to pay policy holders whose risk is realized.