Financial services are the businesses that provide investment, lending, savings and retirement planning. They also include insurance companies and credit card providers. The financial services industry plays a crucial role in supporting healthy economies across the globe. It includes a wide range of companies, from large banks to innovative fintechs and credit unions. They also include community-based nonprofits that offer counseling or money management advice.
The most familiar type of financial service is banking, which encompasses everything from checking and saving accounts to mortgages and auto loans. But there are many other options, too. For example, investment firms, such as stockbrokers and hedge funds, invest consumer money in stocks, bonds, mutual funds and other securities. They make their money by buying at a low price and selling at a higher one.
Another important subsector of financial services is insurance, which offers consumers protection against unforeseen events. It’s common for people to have health, car, and home insurance. But other types of insurance are available, too, such as life insurance or disability income insurance.
Many people who work in financial services have a lot of responsibility and can be expected to work long hours, especially during periods of uncertainty. As a result, stress is high in some roles and can lead to burnout. In addition, the industry is heavily regulated, which can be challenging for new employees to navigate. But the rewards can be great, too. Companies often pay well and are known to give employees intensive training and mentoring.