Financial services help people buy what they want and need in life by enabling the free flow of capital and liquidity in the marketplace. It allows individuals to take out loans and make investments, and protects them from financial loss through insurance. A healthy financial services sector also helps businesses grow and prosper, by allowing them to get the money they need in order to expand and take on more employees.
Providers of financial services intermediate cash from savers to borrowers, ensuring that those with money to invest can find those who need it. They assess a borrower’s creditworthiness and determine their interest rates. They are the people who help you save for your children’s tuition or a new car, or lend you money for those purchases and many others. They are also the ones who manage your investments (stocks, bonds, mutual funds, real estate) and protect you against risk through insurance policies for health, property and liability.
Because they are essential to the functioning of a country’s economy, many governments regulate different aspects of the financial services industry. For instance, banks must be licensed in order to operate. They must follow strict regulations in order to ensure their customers’ money is safe. Like any industry, the financial services sector is cyclical, meaning that it is not uncommon for companies to lay off a percentage of their workforce when times are tough. This means that jobs in this field can be less secure than those in other industries, especially for people starting out their careers.