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Changes in Banking and

Finance
Group 2: E-commerce
At Stephanie’s House
At Charemie’s Office
I. FINANCE
-is a field that deals with the allocation of assets
and liabilities over time under conditions of certainty
and uncertainty. Finance can also be defined as the
science of money management.
The science that describes the management, creation
and study of money, banking, credit, investments,
assets and liabilities.
Advantages Of Financing

Conserve Working Capital

Cash Flow Management

More Flexible Financing Solutions


II. BANKING
- Term used to refer to the process of making
transactions with the bank.
 BANK
- The financial intermediary that creates
credit by lending money to a borrower.
- create and issue money
-stand between depositor and borrower
BANKING ADVANTAGES

• Provide a measure of
security for your funds.

• Can help you save money.


• Can help you establish a credit record.

• Provide you with additional


convenience.
III. BANKING: NEW CHANGES
IN THE ENVIRONMENT
KIM LOUISE CRUZ
BDO-CEO
>Steps in Opening a Basic Account :
• Step1: Make sure you're eligible to open an
account. Before you head to the bank, it's
wise to check whether you meet all the
criteria for opening an account.
• Step 2: Choose the bank that's best for you. Not all
banks are the same, even when it comes to basic personal
accounts. It can be very wise to contact the banks in your
local area to discuss what exactly you'd get if you opened
a basic account.
-Large chain banks
-Smaller local banks

• Step 3: Pick the type of account you want. Most of the


time, one someone opens his or her first bank account, it is
a regular checking or savings account (or both).
• Step 4:
Visit your bank and ask to open an account. Opening
an account in person is usually the best option for first-time
account holders. One big advantage of opening an
account in person is that you can ask the teller all of your
questions and get immediate answers.

• Step 5:
Ask important questions before you finalize your
account. Now is an excellent time to ask for clarification on
any issues regarding your account that you don't
understand.
• Step 6: Supply the necessary information to create your
account.
This depends on the exact bank you're opening an account with.
-Proof that you are who you say you are.
-Proof of address.
-Proof you are a registered citizen.

• Step 7: Keep the account documents you receive


secure. When you finish completing your account, you will
receive documents that contain important information about
your account.
-Your four-digit PIN number.
-Your bank account number.
-Your Social Security number.
At Bank Manager’s office
EVOLUTION OF BANKING:
• Divine Deposits
This was when Ancients put tax on foreign services and good with
something that could be exchanged more easily like coins,
impermanent paper bills and metals used to serve in the place of
fragile.

• Flipping a Coin
These coins, however, needed to be kept. Ancient homes
didn’t have steel safe so wealthy people held accounts at their
temples where numerous people like priest or temple workers
occupied the temples as a sense of adding some
security.
• The First Bank
The Romans, took banking out of the temples and formalized it
within distinct buildings. During these time, most legitimate
commerce and almost all governmental spending, involved the use
of an institutional bank. Julius Caesar, in one of the edicts changing
Roman law after his takeover, gives the first example of allowing
bankers to confiscate land in lieu of loan payments.
• Visa Royal
Eventually, the various monarchs that reigned over Europe noted
the strengths of banking institutions. As banks existed by the grace
and occasionally explicit contracts, the royal powers began to take
loans to make up for hard times at the royal treasury. This easy
finance led kings into unnecessary extravagances – costly wars and
arms race with neighboring kingdoms that lead to crushing dept
• Morgan and Monopoly
J.P. Morgan and Company emerged at the head of the merchant
banks during late 1880s. Although the dawn of the 1990s had well-
established merchant banks, it was difficult for the average
American to get loans from them. These banks didn’t advertise and
they rarely extended credit to the “common” people.

• The Panic of 1907


The collapse in shares of a copper trust set off a panic that had
people rushing to pull their money out of the banks, which cause
shares to plummet. Without the Federal Reserve Bank to take fell to
J.P. Morgan to stop the panic, by using considerable clout to
gather all the major players on Wall Street to maneuver the credit
and capital they controlled, just as the Fed would do today.
The End of an Era
The fact that it took J.P. Morgan, a banker who was disliked by
much of American for being one of the robber barons, to do the
job, prompted the government to form the Federal Reserve Bank,
commonly referred as Fed, in 1913. When the First World War broke
out, America became a global lender and replaced London as
central of the financial world. Unfortunately, a Republican
administration put some unconventional handcuffs on the banking
sector. The government insisted that all debtor nations must pay
back their war loans which was traditionally forgiven.

World War II Saves the Day


WW II may have saved the banking industry from complete
destruction. WW II, and the industriousness it generated, lifted the
American and world economy back out of the downward spiral.
TRADITIONAL BANKING vs.
MODERN BANKING
TRADITIONAL BANKING

In traditional banking system, a customer can open any bank


account in banks, take the facility of saving his money by
depositing money in local bank. He can withdraw his money
through check, counter payment and through bank draft. He
can meet the bank manager and ask his problem. He can take
the physical help for getting loan from bank.
MODERN BANKING
Customer analytics will drive contextual
experiences.
Expedited deployment of digital branch
delivery. Mobile-First design.
Increasing digital and social selling
Mass market acceptance of mobile payments.
Focus on security and authentication.
Enhanced customer rewards.
Innovation, incubation and uncommon alliances.
IV. BANKING SYSTEM
What banks do?
> Accept deposits/ Make loans
> Provide safety
> Act as payment agents
- debit cards
-wire transfers

MONEY CREATION

> Fractional reserve banking - refers to the fact that banks


keep only small portion of their deposits on hand.
How banks make money?

> Deposits - sum of money placed or kept in a bank account.


Largest source by far of funds for banks is deposit. Money
that account holders entrust to the bank for safekeeping and use
in future transactions.

CORE DEPOSITS
* Checking
* Saving

> Share equity


> Debt - produce very little fund but is
still one of contributors to creation of
money for the bank.

> Use of funds


Loans- fixed terms at fixed rates with real property
- adjustable rates
- Credit worthiness are being checked.
- Loans are good investment for banks.
Mortgages
- A conditional conveyance of property as security for the
repayment of a loan.
- secured by collateral of specified real estate
- Individuals engage into this to make large estate property
purchases without paying entire value of purchase up front,

Credit Card

Although using a credit card is similar to using a debit card, with a credit card
money isn’t immediately deducted from your bank account. This is because –
instead of spending your own money – credit cards let you spend money the
bank has lent you, up to a certain limit every month. The bank then sends you
a bill for the total amount of everything you’ve bought once a month. You
don’t have to pay it back all at once, but you pay extra interest on any
money you haven’t paid back when it’s added to the next month’s total.
Back at Stephanie’s House
V. Home Banking
The practice of conducting banking transactions
from home rather than at branch locations. Home
banking generally refers to either banking over the
telephone or on the internet. The first experiments
with internet banking started in the early 1980s, but
it did not become popular until the mid 1990s when
home internet access was widespread. Today, a
variety of internet banks exist which maintain few, if
any, physical branches.
The increasing popularity of home banking has fundamentally
changed the character of the banking industry. Many people are
able to arrange their affairs so that they seldom have need of a
physical branch.
INTERNET BANKING OR E-BANKING
Term used in making bank transactions through the web
the bank is operating.
Online-only banks have profited from this shift in the
industry. The absence of brick and mortar locations allows
online banks to offer favorable interest rates, lower fees and
many other incentives for those willing to bank online.

MOBILE BANKING
The term used in making banking transactions through
different mobile devices such as tablet or smartphones.

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