Actually a bank is a financial intermediary and financial institute who takes deposit from their clients and pay interest to clients against the deposits and those deposits using through by financial loans to clients or invest to any profitable area and by these loans and investment bank earn profit. Also bank do collect checks, drafts and notes and some time home mortgages.
In the banking history the first bank records dates back to around 2000 BC in Assyria & Babylonia. After the roman leaders based on temples, they are made loans also they add two major criteria, accepting deposit and changing money . By this off-course the lone money is come from common people also it keeps money safe by the leaders based on temples. People or consumers are take interest exchange of who deposit money to them. In this activity both party are benefited. And it’s become a trend of banking activity.
In the time period of Renaissance in Italy to the major city of north such as Venice, Genoa and Florence established some bank and 14th century Florence established many branches around the Europe. By this people are getting introduce banking system and take facilities.
In the present time banking system are expressed all over the world and every people are take so many facility from bank. Industrial revolution, international business, company business or any kind of business bank is made an important role. Nowadays most of banks give so many facilities to consumers using by high technology. Such as online service, ATM booth service, customer service, customer relationship management, consultancy with customer, help desk, foreign affairs, foreign trade, money exchange, credit card, online shopping, visa card, etc. Some of banks have only an online presence by higher interest rate and lower fees.
This type of role and facilities driven from when local demand & needs increase. Banks give facilities to consumers and day-to-day banking trend are changing in the light of local needs of local market. It is more spread now. Here below discuss all about that.
Chapter 2) The trend of banking change in the light of local needs of local market.
The trend of banking change it means lots of change which is meet local and local market. Those change is not only meet local need of local market, further these done lots of positive effective thing perspective of Bangladesh like
- Digital Bangladesh
- Banking loan, investment and business trend
- Banking service for customers
- Nationalized Commercial Bank services or structure
- Technology & Human Resource
All of changes are interred related and these things are affecting positive things which are expending Bangladesh economic growth. Here below discuss and illustrate in the world wide aspect.
2.1) Digital Bangladesh – A change we can believe
Digital Bangladesh does not only mean the broad use of computers, moreover it means the modern philosophy of effective and useful use of technology in terms of implementing the promises in poverty reduction, health, education, job placement etc. As a result, the Bangladesh government underscores a changing attitude, positive thinking and innovative ideas for the success of Digital Bangladesh.
The idea of Digital Bangladesh comprises ensuring people’s rights & democracy and accountability, transparency, establishing justice and ensuring delivery of government services in every door through maximum use of technology with the ultimate goal to increase the daily lifestyle of every people. Bangladesh Government’s Digital Bangladesh includes all classes of people and does not discriminate people in terms of technology. Moreover, government has give effort on the four elements of “Digital Bangladesh Vision” which are people involvement, human resource development, civil services and use of information technology in business.
Before this policy most of the government offices work to done by manually. Huge of official file stored and years of years and when if need a particular document of information, its take and need so much time. As a result government all official work is doing very slowly. Another reason is bureaucracy and by this bureaucracy any kind of work need so much time but it is possible to do the particular job within short time.
By this slow motion work it’s through negative impact on banking sector. No country is fulfill by the own resources. Every country need import something from other country. Moreover Bangladesh is an import basic country. Lots of materials import from beyond like as vegetable to any kind putrescent food item or food item, electronic item, apparel item, parts, vehicle lots of thing. By this international business bank give a very much important role by Latter of Credit (L/C), TT, Demand Draft, Bank guaranty etc.
Entrepreneur or business person and organization need this type of support for quick procedure. This quick procedure also may affect in local market. If products demand his getting high that means these products in not available in local market and it also mean somehow or any reason those products import is not done by correctly.
Besides government bank is not give enough support as well as which service entrepreneur or business person and organization need. In this time the private bank is play requires role. They give them all type of supports which is they need. As a result economic circle is run correctly without any hamper. On the other side the government sector who works manually and slowly for bureaucracy they are also take support from private banks for international business.
Past decades from present time private banks give support to government, entrepreneur as well as business person. Day-to-day every importable product items or goods demand is increases and as well as every importer whether government or entrepreneur needs support most and banks gives that. Also in 2009 Bangladesh prime minister’s vision in 2021 Digital Bangladesh, its may increase the whole dynamic circle. In the present time Bangladesh government to feel the role of banks local need of local demand therefore government take step to increase the banking supports.
2.2) Banking loan, investment and business trend
Banking loan, investment and business trend is the give major roll of the trend of banking change in the light of local needs of local market. Between past two decades and present time there is so many changes in and fulfill local needs of local market.
Banks do business in the several ways which is time to time the trend of banking change in the light of local needs of local market. Industrial business or any kind of service business bank gives all type of support. Before two past decades in Bangladesh have few industries and business. Those businesses as well as product are not fulfilling people’s demands and needs due to the population. In everyday people are increasing. In present time the provisional results of 2011 Population and Housing Census, the total population on 15th March, 2011 was 142,319 thousands. This population figure includes people that were present in the territory of Bangladesh and were enumerated in the different types of households, general, institutional and other households.
As a result when population are increasing in every day, then people as well as consumer local need and demand are increasing as same time. On the other side some of businesses possibilities are growing on that time such as land business, heavy industries etc. Money market as well as stock exchange was involved so many stake holders and companies. In the RMG sector Bangladesh done increase so many opportunity and bring so many proud. As a result financial support is mostly need to every people and organizations because of this support have brought them as successful business.
Financial institution as well as bank include private bank and nationalized commercial bank has support these business which is fulfill local needs and demand. This whole system works like pull strategy. Business and organization need those financial supports and bank was providing them.
The investments of banking companies in Bangladesh are of two types. It is closed-ended and open-ended. Closed-ended investment companies sell only a specific number of ownership shares. An investor wanting to acquire shares of a closed-ended investment company need to find another investor who has to wishes to sell. Investment companies do not take part in the transaction. In addition to selling equity shares, closed-ended companies issue a variety of debt and equity securities including preferred stock, regular and convertible bonds, and stock warrants for raising funds. The open-ended ones, generally referred to as mutual funds, repurchase shares in any quantity as and when holders offer them for sales. Thous, the amount of shares of the open-ended investment companies in market changes regularly in response to public demand.
On the other side bank give loans to business and those amounts bring to banks from peoples deposits & banking capitals exchange of giving interest. Also organization can mortgage fixed valuable property against loan and exchange of banking fees and interest.
By these deposits people can save their money and a certain time the amount is bigger, therefore who deposit money into bank, certain time after they use some financial facilities. On the other side bank do business giving loan or investment to profitable area with this money.
2.3) Banking service for customer
Banking service for customer is most important role and it is way off to keep and back customer into bank. It includes responding to customer’s complaints & questions in a thorough and timely manner and interacting with customers through face-to-face meetings, telephone, mail, fax and email.
Into banking service as payment agents by conducting checking or current accounts for consumers, paying check drawn by consumers on the bank, and collecting checks deposited to customers’ current or fixed or saving accounts. Banks also enable customer payments via other payment methods such as clearing House, wire transfers and automated teller machine (ATM).
Banks borrow money by accepting funds deposited on current or fixed or saving accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending.
Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account.
Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too.
In generally bank served following of services,
- Current, Saving and fixed account
- Checking account
- Certify of deposit
- Credit card
- Dedit card
- Money market account
- Individuals retainment account
- Mutual fund
- Home equity lone
- Personal lone
- Capital raising
- Business lone
- Car lone
- Home lone
- Term lone
- Project finance
- Risk management
- Salary lone
- Revolving credit
2.4) Technology & Human Resource
Technology would be the answer to the competitiveness of banking and finance system. On-line accessibility will be accessible to the customers from any part of the globe; ‘Anywhere’ and ‘Anytime’ banking will be realized beyond doubt and fully. At the same time ‘brick and mortar’ banking will co-exist with ‘on-line’ banking to cater to the specific needs of different customers. Technology is expected to be the main facilitator of change in the financial sector. Implementation of technology solutions involves huge capital outlay. Besides the heavy investment costs, technology applications also have a high degree of obsolescence. Banks will need to look for ways to optimize resources for technology applications. In this regard, global partnerships on technology and skills sharing may help.
Technology will bring fundamental shift in the functioning of banks. It would not only help them bring improvements in their internal functioning but also enable them to provide better customer service. Technology will break all boundaries and encourage cross border banking business. Banks would have to undertake extensive Business Process Re-Engineering and tackle issues like a) how best to deliver products and services to customers b) designing an appropriate organizational model to fully capture the benefits of technology and business process changes brought about. c) How to exploit technology for deriving economies of scale and how to create cost efficiencies, and d) how to create a customer – centric operation model.
Entry of ATMs has changed the profile of front offices in bank branches. Customers no longer need to visit branches for their day to day banking transactions like cash deposits, withdrawals, cheque collection, balance inquiry etc. E-banking and Internet banking have opened new avenues in “convenience banking”. Internet banking has also led to reduction in transaction costs for banks to about a tenth of branch banking.
Technology solutions would make flow of information much quicker, more accurate and enable quicker analysis of data received. This would make the decision making process faster and more efficient. For the Banks, this would also enable development of appraisal and monitoring tools which would make credit management much more effective. The result would be a definite reduction in transaction costs, the benefits of which would be shared between banks and customers.
One area where the banking system can reduce the investment costs in technology applications is by sharing of facilities. Bankers are already seeing banks coming together to share ATM Networks. Similarly, in the coming years, bankers expect to see banks and FIs coming together to share facilities in the area of payment and settlement, back office processing, data warehousing, etc. While dealing with technology, banks will have to deal with attendant operational risks. This would be a critical area the Bank management will have to deal with in future.
At the start of the 21st century, the leading banks in the industrial world have become complex financial organizations that offer a wide variety of services to international markets and organize billions of dollars in cash and assets. Supported by the latest technology, banks are working to identify new business niches, to build up customized services, to apply new strategies and to capture new market opportunities. With extra globalization, consolidation, deregulation and diversification of the financial industry, the banking sector will become even more complex.
Over the past decade there has been a rising convergence between the activities of investment and commercial banks, because of the deregulation of the financial sector. Nowadays, some investment and commercial banking institutions compete in a straight line in money market operations, private placements, project finance, bonds underwriting and financial advisory job.
Although, the modern banking industry has brought larger business diversification. Some banks in the industrialized world are entering into investments, underwriting of securities, portfolio management and the insurance businesses. Taken together, these changes have made banks an even more important entity in the global business society.
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 In financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries. Most financial institutions are highly regulated by government.
 Financial intermediation consists of “channeling funds between surplus and deficit agents”. A financial intermediary is a financial institution that connects surplus and deficit agents. The classic example of a financial intermediary is a bank that transforms bank deposits into bank loans.
 The campaign slogan of Barack Obama – “Change we can believe in? gave him a landslide victory in the 2008 US presidential election. Which is using the manifesto of the Bangladesh Awami League (BAL) for the ninth parliamentary election?
 Bangladesh Bureau of Statistics (2011), Population & Housing Census 2011, Total Population count 2.1, Page-3
 Push strategy in marketing can be found in the communication between seller and buyer. In dependence of the used medium, the communication can be either interactive or non-interactive. For example, if the seller makes his promotion by television or radio, it’s not possible for the buyer to interact with. On the other hand, if the communication is made by phone or Internet, the buyer has possibilities to interact with the seller. In the first case information is just “pushed” toward the buyer, while in the second case it is possible for the buyer to demand the needed information according to his requirements.