Financial services are the institutions, services and products that help people manage their money, invest it and save for the future. They include banks, building societies and mortgage banks and companies; credit unions and credit cooperatives; insurance and pension funds; credit-card companies; and the many global payment providers like Visa and Mastercard.
The financial services industry is an enormous one, and there are thousands of jobs available. But not all of them are created equal, and you should carefully consider how your role in the sector fits into your overall career plan. A recent ILO report on the employment trends in this sector highlights some of the challenges to achieving financial inclusion. For example, while 1.2 billion adults have gained access to a bank account since 2011, more work remains to be done to help those with low incomes benefit from the new services being offered.
As the world continues to evolve, so do financial services. Many traditional jobs are being replaced by digital ones, and the way we do business is changing too. These changes are driving innovation, which in turn is creating a variety of new opportunities. This means that more and more people will be using digital platforms to access financial services and make payments, and it’s also enabling those without traditional banking infrastructure to get involved too.
In addition to new opportunities, financial services are also becoming more complex. This is because customers aren’t making big financial decisions at the same time, but at specific life moments – like when they start a family or buy a home. In order to serve them better, banks must be able to understand their customer journey and offer the right product at the right time.
To do this, they need to collect data and analyze it in real time. This requires sophisticated IT systems, which is why the industry is increasingly investing in them. It’s also important for banks to work with other players in the financial ecosystem, as well as non-banks, to improve interoperability and develop shared standards.
Another challenge in the sector is educating people to make good financial choices. This is why many of the organizations in this sector are engaged in financial education. It’s important for the sector to break down barriers and stigma around talking about money and helping people understand how to be more financially healthy.
While the world of financial services seems to be all-encompassing today, it wasn’t always this way. Before the 1970s, each sector of the industry stayed within its own specialty. For example, banks provided checking and savings accounts; loan associations offered mortgages and personal loans; and brokerage firms acted as middlemen between investors and the market, selling stocks and mutual funds. Now, however, it is not uncommon for a company to offer all of these services. This makes it harder for consumers to distinguish between the various offerings and choose the best solution for their needs. It also makes it more difficult for regulators to ensure that financial services are being handled appropriately.