Financial services are the backbone of a country’s economy, allowing people to borrow and invest money securely. They also allow businesses to utilise borrowed cash for operations. It’s one of the most important industries worldwide and drives economic growth, equity market capitalisation and earnings. However, it’s an industry that faces high competition and thin margins and is prone to fraud.
Companies are launching new products that are bringing financial services into the hands of consumers in a more convenient manner. These products range from credit cards and digital payments to wealth management tools. Many of these offerings are also free of the transaction fees that traditionally have made bank services prohibitively expensive for certain customers.
In addition, there are independent agencies that monitor different financial institutions and ensure transparency and fairness to their clients. These include:
Other services in the financial sector include securities research, brokerage (buying and selling stocks, mutual funds and shares), prime brokerage (exclusive type of bundled broker service for high-net worth individuals) and money exchange.
The demand for financial services is increasing as consumers are becoming more educated and aware of the benefits of saving, investing and managing their finances. However, some consumers are involuntarily excluded from the use of financial services due to lack of income, poor credit ratings or high lending risk. This is a challenge that can be overcome through technology solutions and by providing better information to consumers. Despite these challenges, financial services are an attractive industry to work in because of its high pay and opportunity for promotion based on merit.