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Industries & Professions /
Commercial Banking and Financial Services
Each day billions of dollars in financial transactions occur across the United States and the globe. People purchase goods and services, and companies accept funds from buyers. Manufacturers purchase supplies and provide their workers with paychecks. The world runs on a monetary-based system, and banks and financial service companies provide needed monetary services.
Banks give customers a place that is considered safe to deposit their money. Banks track how much money each customer has, pays customers small amounts of interest on their funds, and when customers write checks, they make sure the recipients receive the money from the customers’ accounts. In addition, bank customers can take out loans to purchase homes, cars, or other large purchases such as RVs and boats. Customers can also invest their money in bank investment products such as certificates of deposit, which pay a predetermined interest rate when the certificate has matured, or reached its full term. Banks also provide customers with credit cards, debit cards, and many other financial products.
Financial services companies offer their clients investment products and services, usually intended to fund the clients’ specific future needs such as weddings, college tuition, and retirement. Clients pay their financial advisers to look at their total financial picture and then propose investment and other services to protect their assets and grow them for future use. In addition to traditional investment vehicles such as retirement and investment accounts, many financial service companies also offer insurance products, to safeguard their clients from huge monetary losses due to fire, theft, and natural disasters.
The banking and financial services industry developed in the United States after the revolutionary war to provide U.S. citizens with a common money. Although this system was later discarded, it later became apparent that a common monetary system would benefit everyone.
The financial services industry originated as early as 1792 as the forerunner of the New York Stock Exchange. This exchange allowed investors to buy stocks (a portion or share of a company) and bonds (a loan note from a company or the government to an individual lending money). Investors saw the benefit of investing money. Often they were able to earn a great deal more for their dollar than by other means. Over the decades, more sophisticated investment products were created to meet a variety of clients’ needs. As people lived longer and the cost of living continued to increase, the need to plan for retirement also increased, leading to a higher level of interest in investing.
The industry can be divided into two large segments: banking services companies and investment services companies, although there is some overlap between the two segments. In general, though, banks focus primarily on providing their customers with traditional banking services such as checking and savings accounts, credit cards, and similar services, while financial services companies focus more on investment products and asset protection.
In the banking industry, many jobs are customer-service oriented. Retail branches must provide quality service if they are to retain customers. At branches there are usually branch managers, assistant managers, head tellers or supervisors, personal bankers, and tellers. At the bank’s corporate headquarters, there are many people working behind the scenes to support the branches, as well as offer additional services, like credit cards, and maintain them. These jobs include loan underwriters, processors, collectors, and those who supervise and manage them.
In the financial services industry, workers are analysts, stockbrokers, and several types of sales agents, usually called financial advisers or financial planners. Professionals who sell securities must become licensed.