Financial services are a set of activities and transactions related to the management of money. They encompass banking, investment services, insurance and the redistribution of risk. Financial services are a vital part of the economy, as they allow individuals and businesses to access capital for projects such as buying a home or car, starting a business, expanding a company, or paying for college tuition. A country’s financial services industry can be a good or bad indicator of its overall economic health, as it has the power to influence consumer spending and investment in other areas.
Banks are a fundamental component of financial services, as they pool the savings of depositors and then lend that money to people who need it. The banks then earn money through fees, commissions and the spread of interest rates between loans and deposits. Some financial services companies specialize in specific areas of finance, such as credit card services or mortgage lending. American Express is a great example of a company that offers many credit and debit cards with unique rewards programs.
Some financial services companies are conglomerates, which operate in several sectors of the market. They are able to diversify their risk and take advantage of economies of scale when they operate in different segments of the financial services industry. A well-known financial services conglomerate is JPMorgan Chase, which has a large presence in banking, investment management and insurance.
Other financial services companies include insurance agencies, which sell products like life and property insurance to consumers. These firms also offer reinsurance to other insurers to help them cover catastrophic losses. Underwriting services are provided by financial firms that underwrite debt and equity for businesses, governments, or other entities. Mergers and acquisitions are another part of this market, where financial services companies work to advise clients on potential deals.
As a sector that operates in an environment of constant change and high levels of competition, the demand for talent within financial services is strong. The sector is a natural career choice for those who are interested in an exciting work environment, good benefits, and competitive pay. The industry is also a lucrative option for people who are interested in a long-term career, as promotions are often based on merit. At Phyton, we work with professionals in this sector all day and have seen firsthand the positive impact a job in the financial services can have on an individual’s professional success. Contact us today to find out more about available roles in this market.