Commercial Banking Industry

Commercial Banking Industry - Deposits include demand and...

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Commercial Banking Industry Commercial banks are intermediaries. Their traditional role has been to provide financial services to businesses by acting as bridge between organizations which have surplus funds and those which require them. Throughout their history, the primary function of commercial banks has been to provide credit to ensure that businesses have a flexible supply of funds to meet their short- and long-term obligations. Today's commercial banks provide a much wider variety of financial services, both to businesses and to consumers. Services range from traditional checking accounts and commercial loans to mortgages, credit cards, brokerage services, and insurance. Products and Customers The banking marketplace can be viewed as four general product segments and two broad customer segments. Products are deposits, loans, investments, and fee-based services.
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Unformatted text preview: Deposits include demand and time deposits. Loans range from credit card and overdraft protection to home equity and mortgage loans. Investments are mutual funds sold by and municipal bonds underwritten by the bank. Fee-based services include brokerage, financial planning, asset management, and correspondent banking services provided to other institutions. The banking industry generally thinks of its customers in two broad segments: consumer (retail) and commercial (wholesale). Retail banks target individuals and provide standard products at convenient locations. The business is characterized by large numbers of relatively low value transactions with low margins. Wholesale banking is very different. Fewer, higher value transactions are required and customer satisfaction is more dependent on the relationship between the customer and the account manager....
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This note was uploaded on 04/10/2012 for the course ECON 101 taught by Professor Gonalez during the Spring '12 term at Université de Bourgogne.

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