Financial services refers to the sector that provides services like deposit-taking; lending of all types (including money market and mortgage lending); credit and financing institutions; investment firms; insurance companies; and providers of critical financial utilities, such as credit card networks and global payment systems. It also includes accountants and tax filing services, debt resolution firms, and brokers and dealers in securities and commodities.
Banking, the core of financial services, involves collecting and pooling funds from savers and lending them to borrowers, with the goal of making a profit from the difference between what they pay depositors and what they receive from borrowers. Other providers offer investment services, which involve providing access to stocks and bonds; advisory services, such as investment management and wealth planning; and brokerage and clearing services. These providers are a vital part of the financial services industry, helping to channel cash from savers to borrowers and redistribute risk.
Another important category is insurance, which provides protection against the unforeseen and unpredictable. Insurers offer a range of insurance products, from life and health to property and liability. These businesses are a key component of the financial services sector, and they rely on their customers to trust them to deliver on their promises. They also rely on their employees to be well-trained and knowledgeable about the products they are selling. Because of this, many financial services firms offer extensive training and career development opportunities for their professionals. They are also known to promote from within, favoring aptitude over tenure.