The financial services industry encompasses many different areas of business. Some are very familiar to consumers, like banking or credit cards, while others may be less well-known. One area of financial services is insurance, which covers the costs of unforeseen events. Another common financial service is investment, which provides for growth through the purchase of shares in businesses or other assets.
Some financial services firms are conglomerates, which operate in more than one sector of the industry. For example, Berkshire Hathaway, headed by the legendary Warren Buffett, owns several large insurance companies (including GEICO and National Indemnity) as well as some retail banks and other asset management companies. Other conglomerates focus on specific markets, such as credit card or bank-owned brokerage services.
Financial services companies must adapt to meet evolving customer expectations. Those that do not risk being overtaken by more agile competitors. This can be challenging for legacy institutions that have been around for decades. However, many such companies are embracing innovation to stay relevant.
A growing number of young people are entering the financial services industry. This is partly due to the fact that it is a stable career path with good wages and benefits. It is also because it is a highly skilled field that requires a high level of education and training. The good news is that the average financial services worker makes more than £40,000 a year, and this is on the rise.
The biggest challenges facing the financial services industry can vary depending on the particular area of expertise and the broader economic climate. For example, during a global pandemic, all financial services companies have to take into account the impact on the general economy, and how this will affect their operations. Banks must deal with increased loan defaults, credit unions have to address reduced incomes among members, and investment services firms have to work around the lower stock market levels.
Another major challenge is regulation. While regulatory bodies exist to protect consumers, too much can slow down the industry as a whole. It is important for regulators to strike a balance between maintaining consumer protection and allowing the financial services industry to offer creative new products that can benefit the economy in the long run.