Financial services are any service related to the making, investment and management of money for both individuals and businesses. The industry is huge and includes many different subsectors, such as banks (which keep money in a vault and give people places to write checks; loan associations, which offer mortgages and other loans; credit card companies like Visa and MasterCard, which issue cards and allow consumers to pay for things with them); stock brokers, who buy and sell stocks, mutual funds, etc.; and insurance companies, which help consumers protect their assets against loss or damage (life or health insurance, for example), and protect them against liability and lawsuits (automobile and homeowners insurance, for instance).
It wasn’t always so all-encompassing. Before the 1970s, each sector of the financial services industry more or less stuck to its niche. Banks offered checking and savings accounts, loan companies provided mortgages and auto loans, and brokerage firms and mutual fund companies sold their products to consumers. The lines began to blur, however, as big financial conglomerates merged and started offering products outside their original ranges.
In addition, technological advancements have opened up the field to a host of new players, such as Apple and Amazon, which plan to introduce credit cards that save merchants the interchange fees they pay to networks such as Mastercard and Visa. As a result, some of the traditional jobs in financial services are becoming less secure. Nevertheless, a career in financial services can be rewarding. It’s important to find an entry-level position that fits into your overall financial services career path, though, as not all roles will pave the way to the role of investment portfolio manager or private equity investor.