Financial services are the activities that help people and companies manage their finances. This sector includes banking (accepting deposits and making loans), insurance, securities trading and analysis, asset management and retirement planning. The industry also encompasses credit rating agencies, debt collection firms, credit card networks, and global payment providers such as Visa and MasterCard. Other related activities include accounting and tax filing services, money remittances, and foreign exchange.
One of the most important functions of a financial service is intermediation, or channeling cash from savers to borrowers. In addition, financial services add value by aggregating savings or investments and pooling risk to reduce the impact of losses on individual investors. Banks, for example, take on the risk that borrowers won’t repay their loans and share that risk among many depositors. Insurance companies do the same for policies that cover risks such as death or disability.
Because of their crucial role in a functioning economy, businesses that provide financial services are highly regulated. In fact, many of these firms are heavily dependent on technology to keep up with the ever-changing needs of customers and regulators. This has given rise to a variety of innovations in the industry including online investing, automated operations in stock brokerages, and the use of computer models for financial predictions.
A career in financial services offers a lot of opportunity for advancement, particularly in large firms that have a culture of promoting from within. These companies are known to offer intensive training and mentoring for new hires, giving them the tools they need to succeed. In addition, this is an industry where aptitude is valued more than tenure, so those who are quick-thinking and willing to learn are likely to do well.
In addition, the pay in financial services is often very competitive. A good entry-level salary in this field is around PS45,000, and with experience this can easily increase to the high five figures. It’s also an industry that is accustomed to rapid change, and that means that employees need to be agile in order to adapt quickly. Lastly, it’s worth noting that this isn’t the only industry where innovation is key. It’s important to remember that innovation in this area is not just about creating products, but also about the ways in which those products are used. Ultimately, that’s what makes the difference for both individuals and the economy as a whole.