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What are banking services and their types?

What are banking services?

Banks are defined as the licensed financial institutions that work to receive deposits, grant loans and provide many other banking services such as: currency exchange,
What are banking services and their types?
What are banking services and their types?

While banking services are known as the financial transactions and services that banks provide to institutions, and if the bank deals with individuals, it is known as a retail bank, while the investment bank is the bank that deals with capital markets, and banking services that are provided to businesses include providing loans, credit and a savings account. and current accounts.

Banking services are considered as providing a financial advance to individuals through banks, but it is safe, and it can also be defined as accepting a loan or investment for financial deposits by individuals, it is any activity related to accepting funds owned by individuals and other entities, so that the purpose is Whoever lends this money is making a profit.

Banks offer many different types of banking services; Such as: various banking services, insurance services, financing services, money management services, payroll services, as well as fraud protection services. The most important types of banking services are the following:

Banking Services

Banking services are one of the types of banking services that banks around the world work to provide to customers, each according to his needs. Among the banking services that are provided are the following:
  • Providing loans: Banks are commercial organizations that aim for profit, so providing loans is one of the most important services that are provided with the aim of reaping benefits from profits. Banks provide short-term, medium-term and long-term loans after maintaining cash reserves.
  • Payment by check: Banks provide checks to account holders so that they can draw a check on the bank in order to pay the money, so that the banks pay to customers after verifying their accounts.
  • Collection and payment of credit instruments: Banks offer many different credit instruments, such as: bills of exchange, bonds and checks, so that banks collect and pay different types of credit instruments as a representative of customers.
  • Foreign exchange: Banks exchange foreign currencies in local currencies in order to settle receivables in international trade.
  • Consulting: Banks employ financial and legal experts to advise clients on matters relating to investment, industry, commerce, and taxation.
  • Bank guarantee facilities: Modern commercial banks work to present themselves as a guarantee for the customer.
  • Money Transfer: One of the banking services that they provide to their customers, where money is transferred from one place to another using checks and money orders.
  • Credit Cards: Credit cards allow the holder to make purchases of goods and services, through the credit card provider that works on immediate payment of goods and services, so that the card holder undertakes to pay the purchase amount within a certain period of time.
  • ATM Services: ATMs provide many banking services such as depositing, withdrawing and inquiring about the account.
  • Debit card services: These are cards that enable the holder to withdraw funds electronically from the card holder's account.
  • Internet Banking Services: It is a service that banks provide to account holders so that they can access their account data through the Internet and allow them to perform many services, such as: account transfers, bill payments, balance inquiries.
  • Mobile Banking: It allows access to the account and knowledge of payments and other banking transactions through a mobile phone.

Insurance Services

All business involves many risks, so it is important to manage risks in an effective manner, and one of the most important ways is to obtain the appropriate types of insurance, for example: the risks related to employees can be avoided by: Providing a safe place to work, warning employees of risks and providing appropriate tools and safe for them, and the insurance services offered vary according to the intended purpose.

The insurance services provided by banks are defined as a guarantee by the Federal Deposit Insurance Corporation located in banks, so that bank insurance helps provide protection for individuals who deposit their money in banks in the event of bankruptcy of these banks, and the insurance services provided by banks are as follows:
  • Checking withdrawal accounts.
  • Securing savings accounts.
  • Securing money market deposit accounts.
  • Deposit insurance, such as certificates of deposit.
  • Cashier's check insurance.
  • Postal money insurance.
  • Securing individual accounts.
  • Securing joint accounts.
  • Securing property held for others in order to pay demise accounts.
  • Securing certain types of retirement savings accounts.

investment services

Investment banks aim to connect investors with businesses, where investment banks work with companies by selling bonds that are types of loans. Investment banks work to distribute bonds from the company to clients, and the services provided by these banks are known as investment services.

Which are defined as banking operations that aim to assist individuals or organizations in order to increase capital and provide them with financial advisory services, and other banking services, including the following:
  • Offering shares of new companies for public subscription.
  • Ownership trading.
  • stock trading.
  • Providing advice related to mergers and acquisitions.
  • Providing leveraged finance that lends money to companies for the purchase of assets and the settlement of acquisitions.
  • Restructuring companies with the aim of improving their structures in order to make business more efficient and generate more profit.
  • Receipt and transmission of orders related to financial instruments.
  • Portfolio management.
  • Subscription of financial instruments.
  • Putting financial instruments without a fixed commitment.

Currency exchange services

Many people exchange currencies for their personal use as part of their business operations for their companies or for trading in the financial markets, where the difference in price between the two currencies is known as the exchange rate, and large banks provide currency exchange services through the management of exchanges While small banks buy and sell currencies from a local stock exchange, and the currency exchange services provided by banks are the following:
  • Buying or selling currencies at the current or forward exchange rate.
  • Providing many foreign exchange options.
Banking services are mainly divided into four types; Banking services, insurance services, investment services and currency exchange services, as each service has its advantages and parties that differ according to the required service.
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