Financial services are economic services that comprise the finance industry which is the broader set of service sector firms that provide financial management, including credit unions, banks, insurance companies, investment funds, and consumer lending. They are a vital part of the economy and contribute to the overall prosperity of a country.
When these services are strong, it boosts the economy and helps individuals get access to more goods. But, when the industry experiences problems it can cause a recession and other issues for businesses and individuals.
Insurance is one of the more well-known types of financial services. It is a system where you pay a monthly or annual fee to be covered against certain unforeseen expenses like illness, property damage, and even death. This allows individuals to avoid huge costs that would otherwise devastate their finances.
Banking and insurance are a couple of the most important financial services that people use on a daily basis. This is because they are the ones that protect them from financial disasters and ensure that their savings grow with time.
Another type of financial service is factoring and forfaiting which help in stepping up the export and import of goods. This helps in increasing the economic growth of a nation as well as promoting saving and investments. Moreover, it also helps in minimizing the risks of production by providing protection against financial losses and other business risks. While many people see a career in financial services as lucrative because of the added benefits, Duitch warns that it’s important to understand what type of work you are truly passionate about. He says that, “Working in a financial services job that doesn’t fit with your long-term goals can be stressful and may not lead to success.”