Financial services are one of the most important sectors in any country’s economy as they allow individuals and companies to borrow and spend money securely, save for future expenses like a down payment on a home or new car, and safeguard their assets against loss through insurance. These services are provided by banking, investment, lending and insurance firms that make up the finance industry.
The primary function of financial services providers is to channel funds from savers to borrowers. They also redistribute risk by spreading it across a large group of borrowers so that individual investors don’t have to shoulder all the liability of defaults.
Moreover, financial services help consumers acquire economic goods such as mortgages, credit cards, loans and investment advice. They also provide essential infrastructure such as clearing houses, securities exchanges and commodity trading.
If you’re thinking of a career in the finance industry, start by networking and finding a mentor. Besides, working in a small firm is the best way to gain experience and get your foot in the door.
The biggest challenge for those in the financial services industry is maintaining a balance between profit and customer service. Competition is stiff, margins are thin and the sector is subject to strict regulations to prevent fraud and other mismanagement issues that could hurt the overall economy. However, as the sector continues to grow and evolve with the advent of technology, it is expected to continue its role as a key driver of global economic growth.