Search in Videos, Members, Events, Audio Files, Photos and Blogs Search

TheCustomBoxes|United Kingdom

Offering custom packaging boxes is one of our specialties where our clients can design them according to their own desires and ideas.


My Blog

«back

What is Banking System - Types and Future?

Sep 02, 2019

18,438 Views
     (0 Rating)

Banking is a business of accepting cash deposits and lending money. It is carried out by financial intermediaries, who perform the functions of safeguarding deposits and granting loans to the public.

In other words, banking means accepting for the purpose of lending or investing reimbursable public money deposits upon request and can be withdrawn by check, bank draft, etc.

The banking system in simple words refers to a chain of financial institutions that provide financial services such as deposits, loans, money transfers, etc. to individuals and institutions with interests as a determining factor of the transaction. The banking system plays the role of intermediary between those who save and those who borrow money for investments.

 

The evolution of the banking concept has developed throughout history; its nature is especially present in the different civilizations of ancient Egypt. Appearance of the currency that means the payment was the rapid evolution of the banking business, and reached its formal establishment in the modern era and the Renaissance.

 

Types of banking systems

 

1- Private Banking

Private Banking is a popular, highly professionalized and global management of a client's cash and assets. It seeks to meet the wealth, investment, financial and tax planning needs of individuals or family groups with high assets.

Therefore, private banking is dedicated to financial advice and asset management. Many variables are taken into account, so it is essential how to find out your account number without a check to make a good customer profile:

  • Risk profile.
  • Profitability objectives.
  • Liquidity needs.
  • Temporal horizon.
  • Tax situation.

For a Pvt Banking service to be as such, there must be a bank-client relationship that stands out for offering a personalized service. It is necessary to discriminate between customer banking and product banking: 

Customer banking: it focuses on making the relationship with the client profitable, seeing it as a whole and not sum of products and services. 

Product banking: product placement is not based on the customer, but on commercial campaigns, regardless of the personalized service. 

There are many different ways to structure a private banking service: American style (private banking for investment banking), and more focused on the corporate client of wholesale banking, and the Swiss-Spanish style: private banking more patrimonial, canceled in that sense. A client that seeks, above all, quality of life and control over its assets, who wants to stay away from taxes, inflation, investment costs and invest in conservative products.

 

2- Home Banking

Home banking is called to all those resources, tools and provisions intended to bring banking services to the customer as much as possible.

Within this, we can find different types of banking services depending on the communication path. Therefore, online banking, telephone banking, through the telephone to perform various operations, updates and checks, online or digital banking, which is a broader term that collects all of the above, through online or digital applications. 

This type of banking is a broad concept that consists in providing the possibility of making transactions in each corner; Transactions of any kind with respect to banking services.

 

3- Wholesale banking:

Wholesale banking refers to the provision of banking services to large corporations or institutions that involve personalized and large-scale operations.

 

4- Mixed banking:

Banking institutions that perform commercial functions, that is, retail, wholesale or corporate banking, are called mixed banking systems.

 

5- Fractional reserve banking:

It is this banking system that led to the unique phenomenon of the money multiplier. Banks cannot keep full deposits in reserve; they only hold a fraction of the deposit in reserves and use the rest in loans and investments that generate income for the banks.

 

What bank awaits us in the future?

The technological revolution is affecting all sectors transforming all kinds of industries. That's why in this digital age, more and more people talk about the future of banking, its transformation into electronic banking, a banking sector that has a precious raw material; Customer information 

Banking is generally protected by customer trust since citizens need that trust to deposit their savings, create investment plans, or simply direct their payrolls or pensions. If future banking were based 100% on the Internet, what would happen to customer confidence? 

The banks are the center of our personal finances, and we really need a bank account, debit card or credit card. If these efforts are transformed and initiated digitally, it can generate distrust in those citizens who are not supporters or who are not familiar with this digital age.