Financial Institutions – What are they and what do they do

For those that are looking to pursue a career within the business and finance sector, I want to provide a brief introduction on the different types of financial institutions and what they do.

Financial institutions or financial bodies are establishments which provide some sort of a financial transaction, which can include the withdrawal and deposit of money, loans, investments and advice. I want to highlight some of the different types of financial institutions and their roles.

If you are a graduate interested in starting a career within one of these financial institutions you have a wide choice of roles available.

Commercial Banks

One of the most common types of financial intuitions is the commercial bank; they offer everyday services to individuals and companies, such as current and savings accounts, loans and deposits. They are found in most high streets and city centres.

Examples of commercial banks include Barclays, Natwest, Halifax and RBS.

You can do a varied role within commercial banks. You might also find that there are more types of this institution around, as they are used for everyday banking by the public and companies. Types of roles in different areas that you could pursue include Customer Services, Retail Banking, Corporate Banking, Compliance, Finance, Technology & Operations, Human Resources (HR) and Marketing.

Investment Banks

Although these are sometimes classed as banks and some do offer similar services to commercial banks, their operations are very different. They offer businesses and some governments services such as underwriting debts, facilitating mergers, acting as broker for institutional clients and making markets.

Example of investment banks include Goldman Sachs, Morgan Stanley, CitiGroup and UBS.

Investment banks offer different roles within the different business areas, such as Debt & Equity, Mergers & Acquisitions, Proprietary Trading.

banks 2

Insurance Companies

Insurance companies offer a financial service by providing financial protection to the individual or property such as home and car insurance. By charging premiums insurance helps individuals and companies manage risk and preserve wealth. By insuring a large number of people they can operate profitability and at the same time pay for any claims that may arise.

Examples of insurance companies include Admiral, AXA, ING Group and AIG.

You can  pursue roles within insurance companies within areas such as Graduate Underwriter, Trainee Loss Adjuster, Product Manager and Trainee Actuary.

Brokerages

Brokerages or brokers are companies which act as an intermediary between buyers and sellers to assist in and facilitate securities transactions. They provide their service by charging the client a fee or commission. An example of this is a mortgage broker who will help an individual (buyer) looking to get a good mortgage for a property from a bank (seller).

Examples of brokerages companies include Investec, Apex Insurance and Bairstow Eves.

The roles that are available to choose from include Insurance broker, Real Estate broker & Stock Broker.

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