What companies are in the finance field? Financial services encompass a wide range of businesses that deal with money management. Banks, credit unions, insurance companies, credit card companies, investment firms and brokerage firms are important branches of this broad category.
The evolution of information technologies, the proliferation of financial markets, the blurring of distinctions between bank and non-bank financial institutions and the constant barrage of product innovations have made the financial sector more competitive and dynamic to work in.
The importance of the Financial services sector:
The financial services sector is the main engine of a country’s economy. It ensures the free flow of capital and liquidity in the market. If the sector is strong, the economy grows and companies in this sector are better able to manage risks.
The strength of the financial services sector is also important for the prosperity of a country’s population. When the sector and the economy are strong, consumers generally earn more. This increases their confidence and their purchasing power. When they need access to credit for major purchases, they turn to the financial services sector for loans.
A strong financial services sector can lead to economic growth, while a failing system can slow down a country’s economy.
However, if the financial services sector fails, it can drag a country’s economy down. This can lead to a recession. When the financial system starts to collapse, the economy starts to suffer. Capital begins to dry up as lenders tighten the reins on loans.
Unemployment rises and wages may even fall, preventing consumers from spending. To compensate, central banks lower interest rates in an attempt to stimulate economic growth. This is what mainly happened during the financial crisis that led to the Great Recession.
Major Companies in the Financial Services Sector:
1. Berkshire Hathaway
Founded: 1839 (as Valley Falls Company)
Headquarters: Omaha, Nebraska
Chief Executive Officer: Warren Buffett
Market Capitalisation (as of 18 August 2021): $655.01 billion
Almost everyone has heard of Berkshire Hathaway (BRK-A), the company led by Warren Buffett, one of the richest people in the world. The company’s shares are one of the most expensive in the world and are traded on the New York Stock Exchange (NYSE).
Berkshire Hathaway, founded in 1839 as the Valley Falls Company in Rhode Island was originally a textile manufacturing company. Buffett’s involvement began in 1962, when he began buying shares in the company to take full control a few years later. Berkshire Hathaway has an established record of financial success with companies it has acquired over the years.
2. American Express
Founded: 1850
Headquarters: New York City
Chief Executive: Stephen Squeri
Market capitalisation (as at 18 August 2021): $130.77 billion
American Express (AXP) is one of America’s oldest financial companies, dating back to 1850. It was one of the first companies in the world to offer debit cards and is widely recognised by its distinctive gladiator logo, introduced in 1958.
Today, American Express, or Amex as it is more commonly known, is a Fortune 100 company and a constituent of the Dow Jones Industrial Average (DJIA).
American Express continues to do well despite competition from major rivals Visa and MasterCard, which have more aggressive credit card marketing strategies.
The company is focusing its attention on its credit card offerings, creating a range of cards co-branded with hotels and other travel services such as traveler’s checks, and also venturing into the prepaid card market. American Express’ elite status is reflected in the fact that it can offer a high-quality Centurion card for an initial fee of $10,000 and an annual fee of $5,000.5.
3. Wells Fargo
Founded: 1852
Headquarters: San Francisco, California
Chief Executive Officer: Charles Scharf
Market capitalisation (as of 18 August 2021): $200.41 billion
Wells Fargo (WFC) is a global bank firm and financial services multi-national company with retail and commercial banking offices in the USA and in Hong Kong, London, Singapore and Tokyo. The company is one of the largest banks by market capitalization in the United States and is among the 100 largest companies in the United States.
Wells Fargo has the privilege of owning the first bank charter issued in the US. The company acquired Wachovia Bank in 2008, beating one of its largest competitors, Citigroup (C).
Despite its success and position in the industry, the company has had its share of scandals. One of the most notable agencies involved opened 1.5 million checking, savings and credit card accounts without customer consent, which was widely publicised in 2016. As a result, Wells Fargo was fined $185 million.
4. E-Trade Financial Corporation
Founded: 1982
Headquarters: Arlington, Virginia
Chief Executive Officer: Michael Pizzi
E-Trade Financial Corporation (ETFC) was set up in 1982 in Palo Alto, California. It was originally a private company. E-Trade went public through an initial public offering (IPO) on August 16, 1996.
The company was one of the first online discount brokerage firms to target self-managed investors.10 It continued to rapidly expand its business despite an influx of competition from older, much better established firms such as Charles Schwab.
E-Trade has received industry awards for its trading platform and is consistently ranked in the top three online discount brokerage firms in the US.
In addition to acquiring several other online brokerage firms, E-Trade has expanded its business by offering banking services to its customers, namely sweep accounts that allow automatic transfers between savings, checking and brokerage accounts.
On 20 February 2020, Morgan Stanley announced that it would acquire E-Trade in an all-stock deal for a total consideration of $13 billion. The combined business would result in over eight million customer relationships for a total of $3.1 trillion in customer assets.11 The acquisition was completed on 2 October 2020.
Summary:
Berkshire Hathaway was established in 1839 and is one of the most expensive stocks in the world.
American Express focuses on credit card offerings, co-branded cards with hotels, and other travel services. Wells Fargo is one of the largest U.S. banks by market capitalization. E-Trade s one of the first online discount brokerage firms targeting self-directed investors.
Top Finance Jobs:
1. Accountants:
Accountants are primarily professionals who prepare financial statements according to accounting standards, while auditors are professionals who assess these statements for accuracy, truthfulness, fraud and other purposes using auditing and investigative techniques.
Job Description
Accountants prepare and evaluate financial documents. They ensure that the records of all financial transactions - including taxes, balance sheets, cash flow statements and income statements - are accurate and comply with federal and international accounting standards.
Experience/Qualifications/ Skills required
Professional accountants have at least a bachelor’s degree in accounting. Certified Public Accountants (CPA) in the US must pass an entrance examination and have at least 1 year of accounting experience and at least 150 semester units of higher education.
The position requires skills in financial planning, accounting, auditing, taxation, data analysis and financial reporting.
Work Environment
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Most accountants work full time according to the US Bureau of Labor Statistics, with a significant amount of overtime per week, especially during tax season, quarterly reporting, or the end of fiscal years. Accountants work in virtually every industry and spend a lot of time using computers and spreadsheet software.
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Advanced professional accountants, especially those with a CPA license, can move up to Senior Accountant, Chief Accountant, Accounting Manager, and into senior management.
Job Satisfaction
Extremely (Very Satisfied)
2. Auditors:
Auditors are professionals who assess these statements for accuracy, veracity, fraud and other purposes using audit and examination techniques.
Job Description
Auditors take care of the accuracy of financial statements and other business related documents. These individuals often adhere to the accuracy of business records and are employed to investigate and identify accounting mistakes, misrepresentations, omissions, and fraud.
Auditors also help ensure that documents comply with relevant standards, regulations or policies.
Experience/qualifications/skills required
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Auditors have a bachelor’s degree in accounting. Some can obtain an accounting degree through an entrance exam.
Auditors’ core technical skills include accounting, financial analysis, data analysis and accounting software.
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Relevant soft skills are patience, problem solving, deductive reasoning and concentration.
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Working environment Auditors may work as independent contractors or consultants, or may be hired by organisations to be part of a team or department.
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Professional auditors may gain experience to become senior auditors, senior accountants, and company controllers.
Job satisfaction
High
Types of Financial sectors:
| Element | Financial sector | |
|---|---|---|
| — | — | |
| Credit Card Companies | Credit Unions | |
| Currency Exchange Services | Custodian Banks | |
| Family Offices | Finance Companies | |
| Financial Cooperatives | Financial Markets | |
| Fintech | Hedge Funds | |
| Holding Companies | Insurance Brokers | |
| Insurance Companies | Insurance Underwriters | |
| Investment Banks | Investment Funds | |
| Investment Management | Investment Trusts | |
| Mortgage Companies | Mutual Funds | |
| Payment Processors | Pension Funds | |
| Private Banking | Private Equity | |
| Rating & Credit Agencies | Real Estate Companies | |
| Reinsurance | Retail Banks | |
| State Banks | Stockbrokers | |
| Venture Capital | Wholesale Banking |
Advantages of working at Financial Companies:
Amazing salary packages.
Working in financial services institutions is generally better paid than in other sectors. There are some of the highest-paid employees in this field. With growing experience and continued hard work, you can quickly take big leaps in your career and experience a generous pay rise.
Work-life balance
Many jobs in finance allow for a work-life balance. Financial professionals working independently have the luxury of choosing their own schedule and managing their work and private life. Moreover, financial jobs are often flexible in terms of location, as it is not a specific job.
Career options
The broad field of finance offers a large number of financial jobs that provide a variety of career options for financial professionals. Specialisations allow you to focus on one aspect of finance. There is still much room for growth in this field.
Whether you choose to work in your home country or decide to work abroad, you have several options to look for and settle in outside your home country.
Job security
Job security is an important merit in any field. As a financial professional, you are always in demand, so jobs in this field are usually secure. Moreover, working in finance gives you the freedom to change jobs. If you start to suffer from monotony, you may consider changing jobs.
Learning and growing
A job in finance gives you the opportunity to grow by staying alert. Hard work and motivation in this field can help you reach heights. Employers in the financial companies often encourage their fellow employees to pursue further education.
Earning a higher degree also means a higher salary, so that effort to educate yourself really pays off.
Overcoming Challenges
It may seem a piece of cake, but working in the industry is not easy. It takes education, intelligence and hard work to become a successful financial professional.
This intellectually stimulating field can be very rewarding in the long run. Real determination in the early years of your career can help you rise to the occasion and overcome new obstacles.
Summary: The career opportunities in finance are increasing and offer great earnings with incentives.
Growing Areas of finance in Companies:
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Microfinance is the provision of a wide range of financial services, including savings accounts, to the poor. Microcredit is a subset of microfinance and involves the provision of very small loans (microloans) to impoverished borrowers, often with the aim of supporting entrepreneurship and/or alleviating poverty.
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Peer-to-peer lending via the internet is another growing development in the financial sector, to which microcredit principles have also been applied in an attempt to address poverty, as well as various non-poverty issues.
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Such efforts include crowdfunding, a term that describes the collective effort of employees who network and pool their resources to support causes created by other individuals or financial organisations.
Functions of Financial Companies:
Personal loans
One of the most common functions for finance companies is the distribution of individual loans. These loans to individuals are not connected to a company and are for personal use. The most common type of individual loan is home or mortgage loans, but smaller loans such as car loans are also popular.
Business Loans
Business loans are given to businesses for use in a business. There are many types of commercial loans, and finance companies can handle any of them.
Some businesses want money to buy assets such as property or equipment, while others want a loan for their first major purchase, or a payment on obligations they can’t currently afford.
Business loans are often larger than individual loans and yield more money in interest to the finance company.
Financing transactions
Since financial companies don’t get their money from bank deposits, they need another way to get the money they lend. One of the main functions of a finance company is to borrow money from the banks themselves, or to get it from money market activities.
Equity finance
Equity finance is a special form of financing carried out by finance companies that are owned by parent companies that sell products or services.
These finance companies work with the customers of the parent company and lend them money so that they can buy goods from the parent company. The parent company profits from the purchase of the shares and the interest generated by the loan.
Important Questions
These are the 4 most inquired about questions regarding finance field companies.
1. What is Finance?
Finance is defined as the funding and management of money for individuals, businesses and governments. Finance includes putting money into circulation, managing investments and lending money.
In companies, the finance team is responsible for ensuring that the company has sufficient capital, that the right investments are made and that company income and expenses are properly calculated and taken care of.
2. What qualifications are needed to work at a financial company?
Common qualifications include:
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Bachelor of Commerce [B-Com]
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Bachelor of Arts [Economics]
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Master of Business Administration [MBA]
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Certified Public Accountant [CPA]
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Financial Modelling & Valuation Analyst [FMVA]
3. What are some types of finance?
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Personal Finance : It deals with bank accounts, credit cards, mortgages, taxes and savings etc.
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Corporate Finance : It includes debt, equity , assets, liabilities, balance sheet, revenues, expenses, profit and income statement etc.
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Public Finance : It cover the areas of income tax, sales tax, property tax, inflation , social security and insurance.
4. What is a Financial Company?
Finance company, specialised financial institution that provides credit for the purchase of consumer goods and services by purchasing term deposits from merchants or by granting small loans directly to consumers.
Conclusion:
Conclusively, there are several financial companies that, by their very nature, distinguish themselves in what they can offer customers. These range from banks to insurance companies and from businesses to consumer financial institutions.
However, it is not difficult to find out which companies are active in the financial field as there are numerous financial companies that maintain the global financial market. Different financial companies differentiate in what they can offer to customers.