Banking - Industry Knowledge & Dynamics
Looking for knowledge and key business information on the banking industry?
TechnoFunc brings to you banking industry overview, business model, value chain, competitive landscape and latest trends. Industry knowledge for IT & consulting professionals, consulting firms, industry investors, and all other interested folks in condensed user-friendly format. Quickly enhance your business acumen on banking domain and impress your stakeholders in your next meeting!
What do we mean by the word bank? How did the word bank originated? What is the most simple and concise definition of bank that explains the fundamentals of the banking process? Does the definition of banking vary from country to country? What are the key differentiators between any other business and a Bank? Get answers to all these questions and explore the basics of bank and banking as an industry.
Banking is one of the oldest industries and the banking in the form that we know of, began at about 2000BC of the ancient world. It started with merchants making grain loans to farmers and traders while carrying goods between cities. Since then, the banking industry has evolved from simplistic barter system and gift economies of earlier times to modern complex, globalized, technology-driven, and internet based e-banking model. In this article, we will take you through the major events and developments in the history of the banking industry.
Seven hundred years ago a bank was established in Venice, which made transactions resembling modern banking. In 1407, another bank was founded in Italy under the name of Banco di San Giorgio which was one of the oldest chartered banks in Europe. Sveriges Riksbank (Riksbanken), is the central bank of Sweden and the world's oldest central bank. The Bank of England is the second oldest central bank in the world, and most modern central banks have been based on that model. Let us explore some interesting events as we learn more about these early banking institutions.
Gold has always been considered as a safe economic investment and treated like a currency. All of the economically advanced countries of the world were on the gold standard for a relatively brief time. Under a gold standard, the value of a unit of currency, such as a dollar, is defined in terms of a fixed weight of gold and bank notes or other paper money are convertible into gold accordingly. Explore the fascinating history of gold standard through the lens of history and also learn why banks hold back a certain fraction of deposits as reserves.
Banks play a key role in the entire financial system by mobilizing deposits from households spread across the nation and making these funds available for investment, either by lending or buying securities. Today the banking industry has become an integral part of any nation’s economic progress and is critical for financial wellbeing of individuals, businesses, nations and entire global. In this article we will provide an overview of key industry concepts, main sectors and key aspects of the banking industry’s business model and trends.
The banking industry players deals in a variety of products from savings accounts to loans and mortgages, offer various services from check cashing to underwriting, caters to different types of customers from individuals to large corporates, serve diverse geographies from rural villages to cross-border operations. Thus the banking industry is made up of several types of banks, with their own objectives, roles and functions. In this article, we will explore the various sectors, segments and classifications of banking based on parameters like products, customers, types etc.
This article explains the banking structure in India and how different banks are classified as per RBI Norms. Indian banking industry has been divided into two parts, organized and unorganized sectors. The organized sector consists of Reserve Bank of India, Commercial Banks and Co-operative Banks, and Specialized Financial Institutions (IDBI, ICICI, IFC etc.). The unorganized sector, which is not homogeneous, is largely made up of money lenders and indigenous bankers. Learn what we mean by nationalized banks, scheduled banks, public sector banks, private banks and foreign banks.
The banking industry caters to various sections of society including individuals, small businesses to big corporates, governments, and cross-nation trade. Thus the focus of banking becomes varied, catering to diverse needs of clients through different products, services and methods. To meet this, we need distinctive kinds of banks addressing complex business & social needs. In this article, we will explain various types of banking institutions ranging from retail banks, commercial banks, co-operative banks, investment Banks, central banks to various other types of specialized banks.
Banks perform a variety of operations ranging from basic or primary functions like day to day transactions at a branch to others that may be agency or general utility services in nature. The transactions that are incidental to revenue/sales or sustaining the business are an important element of banking industry value chain. In this article we will look at the key operations performed in the course of banking.
When a bank fails, the depositors suffer as much or more than the bank’s owners. Failure of one large bank can trigger losses across the boundaries of nations. This makes the banking industry an excellent candidate for government regulations. Bank’s lending policy directly impacts economy, especially during economic downswing & upswings. Acting overly cautious, they restrict funds availability, and taking more risks can create the inflationary boom. Let us explore various banking regulations and how they safeguard our interests as consumers.
When you think of a bank, what image comes to mind? A bank is a financial intermediary for the safeguarding, transferring, exchanging, or lending of money. Banks distribute “money” - the medium of exchange. A bank is a business and banks sell their services to earn money, and they need to market and manage those services in a competitive field. Learn more about the fundamentals of banking.
Banks and other institutions play this critical role by performing services essential to the functioning of an economy. Safeguarding, transferring, lending, and exchanging money in various forms, along with evaluating the credit-worthiness of customers, are the main functions that banks perform. Learn more about the role that banks play in shaping economies, their importance in modern, global economy and why they are important for nations as a whole.
Banks are commercial institutions and like any other for profit commercial venture, aim to increase their profits by expanding the business. Unlike other stores and shops, banks are selling services rather than products. Banking is a unique business model, and banks have various sources of income like interest spread, commissions, fees and other revenues. Learn how banks get their funds and how they make money on services. In this article, we look more closely at how banks do business and how they earn profits and explore the value chain of banking industry.
Banking is a unique business and banks are a very important institution to the efficient functioning of the financial system. What are the various components of banks balance sheet? What are the different assets and liabilities in their balance sheet? Deposits are assets for anyone investing it, but how deposits accepted by a bank are represented in Bank's balance sheet? Explore answers to these questions and understand the significance of items that are generally part of the balance sheet of a commercial bank. Understand the business model of commercial banking from an accountant’s perspective.
Banking has changed radically in the last 20 years, and it is now one of the most competitive businesses in the world. Like any business, a bank must attract customers in order to make money. There is an ever-wider array of services that are offered by banking industry today. Technology has impacted the banking industry and changed the way it used to operate. With changing times, banks are also offering new innovative products to meet the dynamic evolving needs of its customers. Learn about various banking products and services.
Everyday people trade goods use services and need to make payments using cash as cash money is the major medium of exchange. Banks have developed various payment methods to facilitate the exchange of money that stimulates growth of commerce, helps economic development and facilitate flexibility with lower transaction costs with security. Various payment systems exists today, ranging from cheque, wire transfer, cards to online transfer. In this article we will discuss different types of payment methods that are available today with banking channels.
Banking today is an exciting, fast-moving, around-the-clock, global activity. Changes in regulation, changes in technology, and changes in competition have pushed banking, to become dynamic organizations that must respond rapidly to changing business circumstances. Advent of private sector banks, rapid pace of globalization, emerging disruptive technologies are changing the dynamics of banking industry as well as the competitive landscape. Read about some recent trends in the banking industry.
Banks are commercial institutions and need to increase their business. Unlike other stores and shops, banks are selling services rather than products. Learn how banks get their funds and how they make money on services. Banks and other institutions play this critical role by performing services essential to the functioning of an economy. Safeguarding, transferring, lending, and exchanging money in various forms, along with evaluating credit-worthiness of customers, are the main functions that banks perform. Learn more about role that banks play in shaping economies.
Banks are commercial institutiuons and need to increase their business. Unlike other stores and shops, banks are selling services rather than products. Learn how banks get their funds and how they make money on services. Read more to learn how the banks earn their profit?
To understand the business model and value chain of any industry, it is very important to understand the customer profile for the products and services being offered. Modern banking industry caters to different types of customers ranging from individuals to large corporates; serve diverse geographies from rural villages to cross border international operations, utilizes various banking channels like branch network and e-banking. In this article we will help you understand the diverse customer base that will help you to understand the value chain.