Financial services help put people’s savings and investment funds to work. They also provide essential utilities such as banking, credit and debt management. Without them, people might hold onto their money so tightly that they could not spend it on other things they want or need.
To get into this field, it helps to have a college degree or equivalent professional experience, but this is not always necessary. Many positions are based on aptitude rather than tenure, and people with the right mix of interpersonal skills can succeed in this industry. It’s also possible to break into this sector by starting out in an entry-level role and working your way up through a company. This gives you the opportunity to learn on the job and gain a deeper understanding of the industry as you go.
The industry is a broad one that includes depository institutions (like banks and credit unions), providers of investment products like stocks, bonds and real estate, insurance companies, and credit and financing organizations. It also includes a wide variety of support services for these sectors, such as credit reporting and ratings agencies, payment system providers (like Visa and MasterCard), foreign exchange and wire transfer services, and brokers.
The intermediation that financial services provide is key to the economy. It channels cash from savers to borrowers and redistributes risk. Banks, for example, pool the money that depositors give them to lend to a large number of borrowers so that they are not crippled if a few of them fail to repay their loans.