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What are Financial Industry Standards?

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  • Written By: Laura M. Sands
  • Edited By: Heather Bailey
  • Last Modified Date: 02 November 2016
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Financial industry standards include education, transparency, accurate record keeping and precise data reporting. High ethical standards and consistency are also counted among the many industry standards. It is through the establishment of reliable financial industry standards that world economies are able to thrive and engage in commerce with other foreign economies.

When studying for a career in high finance, students spend a great deal of time learning financial industry standards. In addition to various financial industry ratios, calculations and theories that are important to specific careers, students must have a keen understanding of financial industry rules and regulations, which help shape these standards. In careers where a license must be obtained to meet employment requirements, individuals must obtain a passing score on an examination that measures the applicant’s knowledge of the career she or he is planning to enter, as well as that person’s knowledge of crucial financial industry standards.

In order for a financial expert to publish a thorough financial industry analysis, an in-depth study of financial industry standards must also be conducted. Specifically, financial experts study various private and government-run financial institutions to assure that financial industry standards are being strictly adhered to. Often, these analyses serve to notify officials of foul play within a financial organization when it is discovered that standards are not being systematically adhered to.

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Financial industry standards also include a rather high educational standard. For most jobs within the industry, an undergraduate degree is a requirement. In many instances, however, a graduate degree must be obtained in either business, accounting or an economics-related field before an individual can expect to work within the industry. When working in positions such as stockbroker, investment adviser or banker, high educational standards, as well as unique licensing requirements, must be met. Doing so assures that individuals working in high finance are trained in standards and ethics, in addition to having the necessary financial and business education needed to work in their respective careers.

Honesty in reporting, full transparency and keeping accurate data records are very important financial industry standards. Adherence to these standards creates trust between industry workers and the general public, as well as the trust needed to conduct business within and between governments. A willful violation of these standards is not only ruinous to the reputation of an individual or a firm, but may also result in criminal prosecution.

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