Financial services are the processes by which people and businesses manage their money. They include everything from storing and exchanging cash to providing credit and investment funding, insurance and other risk management tools. The industry is a crucial part of our economy and the global network, and its success depends on a high level of trust in its participants. It also relies on a robust regulatory framework to protect savers and investors.
The sector is huge, encompassing thousands of depository institutions, providers of investment products, insurance companies and credit and financing organizations. It also includes the critical financial utilities that support these functions, such as credit card networks and payment systems. It is not surprising that the industry is both complex and lucrative. But not everyone in the sector is suited to succeed. For example, if you dream of becoming an investor, working as a bank teller probably won’t help you reach your goals.
In the developing world, only about a fifth of families use financial institutions to store their savings. Many others keep their money under their floorboards or in a container on their home’s roof, which is not secure against fire or theft. Financial services allow families to deposit their cash in an institution that will keep it safe and make it available when they need it. This enables them to buy land, build or improve their homes and obtain consumer durables and livestock. It also allows them to invest in small enterprises that will create jobs for the community.