Financial services is a sector of the economy that includes thousands of depository institutions, providers of investment products, insurance companies and other credit and financing organizations. It also includes the critical financial utilities that support these activities.
The financial services sector is the main driver of a country’s economy and helps put money to productive use. Instead of stashing it under their mattress, consumers give it to intermediaries who buy stock, bonds, commodity assets and even real estate.
This is done to help people make the most of their money, as well as to avoid risks. These intermediaries, such as banks, are often regulated to ensure that they are acting in their best interest and helping maintain consumer trust.
Careers in financial services pay well and are highly rewarding, with many jobs allowing for a healthy work-life balance, especially for those who are independent and can choose their own schedules.
There are many opportunities to specialize in a particular area of the sector, so you can tailor your education and skills to specific needs. This is a great way to get a competitive edge in the industry.
A key distinction in the financial services industry is between what are called “financial goods” and what are called “financial services.”
A financial good is something tangible that can be sold or repurchased, such as a mortgage loan to purchase a house. A financial service is something that someone does for you to obtain a financial good, such as preparing a mortgage application or arranging a car insurance policy.