When people think of financial services, they might picture banks, brokers and mortgage lenders, but the industry is much broader than that. It also encompasses insurance companies, investment funds and even Wall Street. The good news is that a healthy financial services sector is vital to the global economy. It allows consumers to borrow money for a home, education or car and gives businesses the opportunity to grow through loans. It also helps individuals save for retirement and other goals through investments, and safeguards their property and health with insurance policies.
Many different kinds of financial services are available, but they all fall under the broad category of “financial goods.” A financial good is something that lasts (like a mortgage or a car), while a service involves the transaction necessary to acquire it. For example, getting a mortgage involves getting an appraisal and loan application.
The industry also includes the depository institutions that hold consumers’ savings and provide deposit accounts, credit and lending services, and the providers of critical financial utilities like credit card networks and global payment systems, such as Visa and MasterCard. It also includes the securities market, which provides facilities for trading in stocks, bonds and other asset classes; the insurance market, which offers insurance against various risks; and the reinsurance market, which spreads risk among several insurers.
There are a variety of benefits to a career in the financial services industry, but the work can be stressful and a good work-life balance may not always be possible. People in some jobs in the industry can expect to work 16 to 20 hours a day, and burnout is a real concern.