Financial services are the economic services provided by the finance industry, which encompasses a broad range of business sectors. They include banking, credit unions, insurance, and other institutions that manage savings, investment, and consumption of funds. These companies often serve individuals, small businesses, large corporations, and even governments.
One of the most common financial services is payment processing, which involves the management of funds between consumers and merchants. This includes the issuance of credit and debit cards, electronic transfers, and checks. Another service is asset management, which allows investors to pool their money for the purpose of investing in a wide variety of assets. In addition, these companies provide services such as debt resolution and credit-card debt relief.
While the financial services sector is primarily concerned with saving and lending, it also includes other activities like investment, insurance, and the redistribution of risk. Providers of these services channel cash from savers to borrowers, making profits from the difference between interest rates charged on loans and paid on deposits. They also manage money and risk by aggregating the money of many depositors into a fund that can absorb losses from a single default.
This is why it’s important for potential financial services workers to thoroughly research the field and determine which sub-sector (and segment) is right for them. In the end, choosing a position that fits well with your unique life experiences will help ensure long-term success in this fast-paced industry.