Financial services are economic services tied to finance, provided by financial institutions. These institutions take in deposits and grant loans to consumers and businesses, providing a variety of financial products such as checking and savings accounts, credit cards, investment options, and mortgages. Financial services also include money transmission, monetary policy implementation and regulation, securities trading, financial data processing, and insurance underwriting. The industry is a driving force behind business and consumer finances, as well as a major contributor to global economic growth. The extragovernmental clout of the finance industry is often a source of controversy in industrialized countries, as seen in the Occupy Wall Street civil protest movement of 2011.
In the most basic sense, financial services are the activities that companies and governments engage in to further their monetary goals. This includes the buying and selling of assets, such as stocks and bonds, and it also includes debt repayments and interest payments. This is a large field that encompasses many other smaller categories of activities, such as lending money, establishing accounts, and managing investments.
The financial services sector is a massive part of the economy, with over $5 trillion in total market capitalization. The most prominent players are the big five global banks, which make up over half of this total. This sector is particularly susceptible to economic crises, which have occurred frequently since the 1980s. This has caused consolidation in the industry, with big firms buying up small ones and cutting jobs. It has also led to a shift from traditional banking services to more diversified offerings, such as brokerage and asset management.
Some of the most important functions of this sector are deposit-taking, lending of all types, financial leasing, payment and money transfer services, securities trading, securities underwriting, and reinsurance. Other important services are custodial, depository and trust services; clearing and settlement services for financial instruments; and advisory, intermediation, and other auxiliary financial services.
A career in financial services can be exciting and rewarding. There is a lot of opportunity for advancement in this field, and it is a great place to build up experience and contacts. It can be a fast-paced environment, with new tools being introduced to the marketplace seemingly every day. The pay in this sector is competitive, with starting salaries around PS45,000 and the potential to increase into the high 5 figures.
The advent of technology in the industry has radically changed how it operates. For example, the Internet has allowed clients to check their bank accounts online at any time, and brokerage firms are now able to offer online trades. It has also impacted the way that companies work, allowing them to look up information on prospective customers much more quickly, and creating a more streamlined process for insurance underwriting. In addition, computer models are now used to help create investment strategies. The industry is very competitive and requires the right mix of skills to thrive, but it can be a very worthwhile career choice for people who are willing to put in the effort.