The financial services industry comprises a huge range of activities that help people and businesses obtain economic goods. It includes the banking sector, securities trading and mortgage lending, among other things. It also encompasses insurance and asset management. Financial services are a vital part of the economy. A healthy financial services sector boosts the overall economy by providing people with access to credit and investment opportunities, while allowing businesses of all sizes to grow and prosper.

People could handle many of the activities within the financial services industry themselves, but they often opt to use outside professionals. This is because financial services providers offer a variety of valuable intermediation functions. These include aggregating savers’ money, monitoring investments and pooling risk. They may also provide a number of services to both individual savers and borrowers, enhancing their value by reducing transaction costs or providing greater choice. Banks, for example, intermediate savings from depositors and loan it out to borrowers. This helps reduce the risk for depositors and allows banks to take on more borrowers (as they spread the risk of default). Insurance companies do the same by offering insurance to groups of individuals, which enables them to pay out large claims without going broke if only a few members default.

A healthy financial services sector is essential for the world economy. It provides people with the means to make large purchases, invest in businesses and protect their assets through insurance. It also creates millions of good jobs and enables families to save for the future. When the financial services industry fails, the economy suffers.

There are a number of career paths into the finance industry, with some sectors offering more lucrative jobs than others. Investment banking, for instance, can offer high salaries and fast advancement opportunities. However, it’s important to remember that the majority of jobs in the sector are entry-level positions. It takes time to build a reputation in the industry, and even more to land a top job.

For those interested in a long-term career in the finance industry, obtaining a mentor is a good idea. Having a mentor can help you network and connect with people in the field, and can teach you valuable skills that will serve you throughout your career.

The financial services industry is a global business. Its history dates back to ancient times, with the first monetary systems developing around the world. The modern sector was shaped by events such as the Gramm-Leach-Bliley Act in the 1990s, which allowed banks to offer more investment and commercial banking services, and the subprime mortgage crisis of 2008.