The Financial Services Sector
The financial services sector is an important component of a country’s economy. It provides an array of products and services that help people and businesses manage their finances, and it employs millions.
A healthy financial services sector allows individuals to buy homes, cars, education and other necessities, save for down payments or retirement, and safeguard their property through insurance. It also helps business owners get the funds they need to grow and thrive.
Generally speaking, the financial services industry encompasses thousands of depository institutions (banks and other financial intermediaries), providers of investment products, insurance companies, credit and financing organizations, and the critical financial utilities that support these functions.
Many financial intermediaries have a wide range of products and services, and each sector within the financial services industry has different regulatory and legal requirements. These regulations are designed to protect the interests of consumers, but can slow down innovation and growth.
In most countries, there are independent agencies that oversee different financial institutions’ operations, uphold transparency and ensure their clients are treated fairly. These agencies can be found at the federal, state and local levels of government.
The financial services sector is the most important driver of a country’s economy, providing free flow of capital and liquidity in the marketplace. It also plays a role in ensuring that the government raises adequate money to fund its operations and other needs.
Some of the key services provided by the financial services industry include: banking, debt and equity underwriting, mergers and acquisitions, structured finance, and investment management. These services are essential for businesses and governments to raise the money they need.
Banking – Provides a place to hold checking and savings accounts, as well as mortgages and loans. Loan associations and brokerage companies also offer services that help customers invest in stocks, bonds or mutual funds.
Debt & credit – Offers short-term funding to meet revenue or capital expenditure. This can be done through the sale of Treasury Bills in the money market or by selling government securities in the securities market.
Asset management – Maintains and manages portfolios of securities to maximize the returns of investors. This can involve a mix of traditional investments and more complex derivative products.
Insurance – Provides protection from risks such as death or disease. This can include life and health insurance, as well as disability and auto insurance.
There are a lot of different careers within the financial services sector, from analyst to compliance officer. These roles require a high level of specialized knowledge and skill, and a strong work ethic.
Some roles can be very stressful, though. They can be more demanding than jobs in other sectors, and there are opportunities for burnout.
Pay in the financial services industry isn’t large, but it can be very competitive. This can lead to a significant increase in salary after a few years in the field, depending on your job role and experience.
At Perficient, we work with our financial services clients to define, develop and implement business and technical strategies that drive growth and delivery excellence. We also advise on new technologies and FinTech that are changing the way financial services are delivered.