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Banking Services

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BANKING SERVICES

Understanding Banking Services

Introduction

Banking consists of many activities that can be done through a number of financial institutions that accept deposits from individuals and other entities, and then use this money to offer loans and to invest and earn profit.
Banks can be placed into certain categories based on the type of business they conduct. Commercial banks provide services to private individuals and businesses. Retail banking provides credit, deposit, and money management to individuals and families.
Community Banking

Community banks are smaller than commercial banks. They concentrate on the local market. They provide more personalized service and build relationships with their customers.

Internet Banking

Internet banking provides these services via the world wide web. The sector is also called e-banking, online banking, and net banking. Most other banks now offer online services. There are many online-only banks. Since they have no branches, they can pass cost savings onto the consumer.

Credit Unions

Credit unions are financial institutions that operate similarly to standard banks in many ways, but with a different structure. Customers own their credit unions. This ownership structure allows them to provide low-cost and more personalized services.

Investment Banking

Investment banking finds funding for corporations through initial public stock offerings or bonds. They also facilitate mergers and acquisitions.

Loan Banking

Savings and loans are specialized banking entities, created to promote affordable home ownership. Often these banks will offer a higher interest rate to depositors as they raise money to lend for mortgages.

Community Banking

Community banks are smaller than commercial banks. They concentrate on the local market. They provide more personalized service and build relationships with their customers.

Key Takeaways

Banking offers savings, loans, and investment products and services to individuals and businesses.

There are many types of banks, or financial institutions, with specialized functions and populations they serve.

Banking is regulated at the national level by a central bank—the Federal Reserve in the U.S.—that works to maintain liquidity and economic stability.

If left unregulated, banks compete in an open market which has historically proven to be risky and led to numerous financial crises.