Financial services are a broad sector that affects everyone in both personal and professional ways. When we think of the industry, we often think of Wall Street and bankers, but it also includes brokers, mortgage lenders and even credit-card companies. “It’s everything that touches money,” says Ryan Duitch, president and CEO of Arro, an online lender. It’s a huge sector, and it impacts not only individuals but small businesses, large companies and nonprofits as well. The more people are in control of their finances, the stronger the economy is — which is why it’s important to understand exactly what financial services are and how they work.
The financial services industry consists of everything that deals with managing money and creating value for individuals and organizations. This sector is a vital component of the world economy, affecting consumers and businesses alike. When people feel financially healthy, they are more resilient when faced with unexpected events, have better physical and mental health, and are able to save for the future. This is why it’s crucial to have a robust and thriving financial services sector.
A key distinction to understand is the difference between financial services and financial goods. Financial services are tasks that help with money management, like investing or taking out a mortgage. Financial goods are tangible assets that have value, such as stocks and bonds, real estate, or insurance policies. It’s important to make this distinction because while the lines between different types of financial services are blurring, it’s essential to know what each sector does and how they connect with one another.
In the past, banks were the center of the financial services industry, but regulations prevented them from offering a wide range of products that customers wanted. This led to the growth of other sectors, like mutual funds and brokerage firms, which were able to offer more options than banks could. Then, as technology changed the way we manage our money, the lines between these sectors began to blur. Now, it’s common for companies to offer products outside of their original range and merge or acquire other companies.
The financial services industry consists of many different jobs, and the type of career path you choose depends on your skills and goals. Some positions require a bachelor’s degree, while others are more hands-on and rely on interpersonal skills. The good news is that no matter what type of career you choose, working in the financial services industry will give you a strong set of skills that will serve you for a lifetime. So if you’re thinking about a job in this sector, be sure to research the specific role and see how it fits into your career plans. Then, you’ll be ready to take the leap into your new financial services career. Good luck!