Financial services is an industry that includes banks, brokers and mortgage companies. It also includes private equity funds, insurance providers, investment banks and credit card companies. While it may seem like the various branches of the financial services are separate entities, they’re all interconnected in a very intricate way.
The core function of financial services is to serve as an intermediary between savers and borrowers. Banks offer depository services by accepting deposits in the form of checking and savings accounts, which earn interest for the financial institution. They then lend that money to individuals and businesses who require capital for a number of reasons, such as starting a business, purchasing a home or financing an investment. Financial institutions also provide credit services by evaluating the creditworthiness of potential customers and granting them loans or credit cards based on their approval.
Regulatory agencies are also part of the financial services industry, which includes independent groups that are responsible for overseeing different financial institutions and ensuring they operate fairly and transparently. These include the Financial Industry Regulatory Authority (FINRA) and the Office of the Comptroller of the Currency.
One of the most prominent branches of financial services is investment banking, which includes providing due diligence on investments and advising companies on mergers and acquisitions. This is a very fast-paced industry that requires the right people with a drive for success and a deep understanding of complex finance matters.
Another sector of financial services is asset management, which involves managing pensions, insurance assets and other forms of investments. Many large financial services firms have their own department that provides these services, while others work with outside asset managers to help meet the needs of their clients.
Finally, the risk management branch of financial services includes underwriting debt and equity for small and large businesses as well as government entities. These professionals evaluate the risks involved in a specific venture or transaction, then make a recommendation on whether to invest or not. This is a very important part of the financial services industry, as it helps reduce the overall risk for investors and helps businesses secure funding when needed.
In today’s ever-changing world, it is important for a company to have a diverse portfolio of financial services offerings in order to be competitive and stay relevant. As a result, it is common for financial services companies to merge or acquire other entities in the industry. This can be beneficial for both parties, as it allows a smaller firm to expand its offering and a larger firm to access new markets.
A career in the financial services industry offers a variety of opportunities and is extremely rewarding. However, the nature of the work is often very stressful and can lead to burnout. It is important for people considering a career in this field to carefully weigh their options and ensure they’re making the best decision for themselves. Phyton Talent Advisors can help you find the right position for your career goals and skillset.