AN OVERVIEW OF BANKS AND THE FINANCIAL-SERVICES SECTOR

1. AN OVERVIEW OF BANKS AND THE FINANCIAL-SERVICES SECTOR

2. Traditional Services Offered By Banks • Exchange of Currency • Commercial Notes and Loans • Offering Savings Deposits • Safekeeping of Valuables • Supporting Government Activities with Credit • Checking Accounts • Trust Services

3. Recent Services of Banks • Consumer Loans • Financial Advice • Cash Management • Equipment Leasing • Venture Capital Loans • Selling Insurance Products • Security Underwriting and Brokerage Services

4. Mutual Funds and Annuities • Annuities, long term saving plan that promise the payment of a stream of income to the annuity holder beginning on designated future date • M F. professionally managed investment programs that invest in stock, bonds ….etc

5. Merchant Banking Services • Risk management and hedging services • either acting as dealers( market maker) by protecting bank’s customers from third party, • Or directly selling their customers the bank’s own risk protection contract where they take the customer risk and find creative way to mange it • E.g J.P Morgan and Citibank,

6. The Roles of Commercial Banks and Their Closest Competitors • Intermediation Role • Payment Role • Guarantor Role • Risk Management Role • Savings/Investment Advisor Role • Safekeeping/Certification of Value Role • Agency Role • Policy Role

7. Trends Affecting Banks and Other Financial Service Firms Today • Service Proliferation • Rising Competition • Government Deregulation • Increased Interest Rate Sensitivity • Technological Change • Consolidation and Geographic Expansion • E-Banking and E-Commerce • Convergence • Globalization • Increased Risk of Poor Performance and Failure