The financial services industry is an expansive group of businesses that facilitates banking, investing, credit card transactions and loans. This sector also includes insurance companies, as well as providers of critical financial market utilities like clearing houses, derivative and commodity exchanges and payment systems.
Most people are familiar with the concept of insurance, which is considered a financial service. In essence, it is a safety net that helps individuals and families cover the costs of large expenditures that are typically unplanned for or unforeseen. For instance, if someone has a home or automobile insurance policy, these policies help them pay to repair or replace the assets should they need to.
Other common financial services include brokerage and reinsurance companies; investment funds; asset management firms; credit-card companies; the provision of credit ratings; and the provision of debt and equity capital to small, medium and large enterprises. The reinsurance industry, in particular, is a vital component of this industry, as it essentially redistributes risk across the economy.
From a business standpoint, financial services firms are heavily invested in their employees and provide ample on-the-job training opportunities. This is because the industry is highly specialized, and many positions require significant technical knowledge. As a result, financial services companies tend to promote from within and reward merit more than longevity, which is another perk for those looking to advance their careers quickly. However, not all financial services jobs pave the way to a leadership role; in fact, some might actually hinder one’s professional development.