A healthy financial services sector is a vital part of any economy. It provides people with loans and credit for homes, cars, education, and more. It allows businesses to grow and expand, and it safeguards investments and property through insurance. Financial services also provide millions of jobs with good pay and benefits.
The financial services industry is a diverse one that includes many different types of companies. Regulatory bodies oversee these companies and ensure they operate fairly and with integrity. They also help to set standards for transparency and protect consumers. Some examples of these companies include banks, credit unions, and investment firms.
While traditional brick-and-mortar banks remain an important part of the industry, digital offerings are growing at a rapid pace and expanding to new customer segments. This creates a challenge for established institutions to keep up with customer demand while adhering to strict government regulations. In addition, new players are entering the market at a fast pace and leveraging technology to disrupt traditional business models.
There are a variety of career paths within financial services, from entry-level positions to senior management. Most financial services firms offer on-the-job training and often promote employees based on merit rather than tenure. This can be a benefit for those who are interested in developing their skillset and moving up quickly within the company.
During the 1970s, consumers started to move away from traditional banking to other financial services providers like mutual fund companies and brokerage firms. The lines that once separated the different sectors began to blur, and some companies even merged to increase their range of products.
The growth of the tertiary sector is very essential for a well-developed country because it leads to balanced economic development. It is the tertiary sector that provides employment to most of the population. This sector contributes to the growth of a country’s GDP.
The role of financial services in the development of a country can be assessed by the growth of its capital markets. If there is hectic activity in the capital market, it indicates that the country’s economy is on a positive track.
In a developed country, the financial services industry helps in the distribution of funds to the primary, secondary and tertiary sectors so that all three of them can develop equally. In this way, the overall growth of a country is enhanced. It also improves the employment opportunities in these sectors and reduces poverty by bringing in more income to the poorer sections of the society. The financial services industry also helps in the development of backward areas of a country by providing fiscal and monetary incentives to them. This enables them to improve their production and to reap higher profits which in turn boosts the economy of the country. This process is continued until the backward areas catch up with the advanced regions of the country in terms of development.