The industry, which had employed 1.14 million people at the end of the second quarter of 2012, had anticipated adding to staff numbers over the summer.
However, the lacklustre economy meant that of the 104 companies that responded to the Confederation of British Industry (CBI) and Pricewaterhousecoopers survey (Pwc), 49% saw business volumes fall while only 30% recorded a rise in business.
The balance of -19% represented the first fall in business volumes since June 2009.
While institutions, notably banks, succeeded in widening spreads between the interest they charge on loans and what they pay out on deposits, this did not offset falling income, rising costs and increased bad debts.
It led to profits declining in the last three months, for the first time since September 2009. Job numbers fell at the fastest rate since March 2011.
A number of lenders, led by part-nationalised institutions such as Royal Bank of Scotland and Lloyds Banking Group, have been cutting back staff numbers and selling businesses they see as peripheral to their core purpose as they seek to rebuild their balance sheets.
Kevin Burrowes, UK banking leader at PwC, said: "Employment volumes tend to track income fairly closely."
He said that institutions are moving out of marginal areas to save costs and activities in and around investment banking had been particularly trimmed.
Sentiment in the financial services industry about the overall business situation also deteriorated for the second quarter in a row.
CBI director for competitive markets Matthew Fell said: "Companies expect this recent weakness in activity to be temporary and anticipate that growth in business volumes and incomes will return to positive territory next year."
However, he said uncertainty about future demand and the eurozone crisis meant firms were scaling back their investment spending for the coming year and cutting employee numbers.
Steve Davies, the Edinburgh-based head of UK retail banking at PwC, said: "With September marking the fourth anniversary of Lehmans and fifth anniversary of Northern Rock, there is no disputing that in the intervening years the financial crisis has altered the landscape of the financial services industry not only in Scotland and the UK but also globally.
"For the banking sector, the growing cost and extent of regulatory change continues to be challenging.
"Weak demand, viewed as one of the greatest threats to growth and the leading barrier to investment, is also of real concern.
"Growth in retail banking has come to a halt as banks focus more on commercial than consumer lending."
Financial service businesses plan to spend significantly less over the next 12 months on land and buildings and on vehicles and plant and machinery. However, expenditure is planned to increase in marketing and information technology.
More than three-quarters of firms plan to increase spending on regulatory compliance as they come to terms with rules imposed at home and by international institutions.