Financial Services Industry Basics

Getty Images

The financial services industry plays a vital intermediary role in the world economy, moving funds from entities with excess funds to those with a need for funds. It includes firms that are engaged in activities such as investing, lending, insurance, securities trading and securities issuance. Its clients are individuals, businesses, nonprofit organizations and agencies of government.

Bank deposits provide the capital for bank loans.

The sale of stocks and bonds to investors supports the operations of businesses and governments. Insurance contracts help to pool and manage risks.

This is not an exhaustive list, but the financial services industry encompasses companies in one or more of the following lines of business:

  • Banking
  • Insurance
  • Securities Brokerage (or Financial Advisory Services)
  • Investment Banking
  • Securities Trading
  • Investment Management (or Money Management)
  • Securities Analysis
  • Financial Planning
  • Wall Street

Also note that a broader definition of financial services can include employers and career paths in:

For More Information

The North American Industry Classification System (NAICS) replaces the old U.S. Standard Industrial Classification (SIC) system as the final word in defining industries. Follow this link and look at NAICS industry code 52 for detail on the financial services industry.

Clicking on the codes in the left column of the table will call up finely-grained definitions of each sector within the industry.

Other Related Categories

You may want to browse our extensive library of articles on these other aspects of financial careers:

Note, however, that there is a potential source of confusion regarding careers in finance. We deal with this in the next section.

Financial Management

When people discuss finance or financial careers, they might be referring to the financial services industry, or to the finance function that is common to all business enterprises, in every industry. Additionally, note that the finance function is itself one of many possible career paths within the financial services industry.

The finance function and financial management encompass a variety of job categories. A common misconception is to equate these fields with accounting. In fact, degrees and/or professional certifications in accounting are not necessary for most jobs in financial management.

Careers in financial management, for the most part, fall into these 3 broad categories:

Also see our discussion of careers in accounting and auditing, and our explanation of what a financial analyst does.

Find Your Next Job

Job Search by