BANKING AND FINANCE DEFINITION AND BANKING AND FINANCE PROJECT TOPICS
Even though the terms banking and finance are most of the time used together as an institution but there is a very big difference in both. Banking and finance are two different matters of subject, but both terms collectively refer to the services and activities by banking and non-banking financial institutions.
The banking here is a group or network of institutions governing by laws that provide a great variety of financial services to the society. At its most basic, banking involves an institution holding money on behalf of customers that is payable to the customer on demand, either by appearing at the bank for a withdrawal, by writing a check to a third party, electronic machines, mobile, or shortcode transactions.
The banking system also provides loans to businesses and individuals. Many banks also perform other services for a fee as charges; for instance, they offer certified checks to customers guaranteeing payment to third parties, ATM Cards, mobile, and shortcode charges.
In some countries, they may provide investment and insurance services. With the exception of Islamic banks, banking almost always involves the payment of interest on deposits and reception of interest on loans. Banking is regulated by the laws and central banks of individual countries.
The members of the banking system and the functions they typically perform include: (1) commercial banks that take deposits and make loans, (2) investment banks that specialize in capital market issues and trading, and (3) national central banks that issue currency and set monetary policy.
Banking is becoming the most important part of today’s business. Many of us require the services of a bank in conducting our day-to-day transactions, which is also the case for small businesses and large firms that also obtain the services of the banking system. The bank will obtain deposits from those customers that need a safe place for the surplus funds. The banks use funds to provide loans to the rest of the bank’s customers that have funding shortages, for a fee known as an interest payment. The services obtained from investment banks include helping firms to raise capital in the stock markets by undertaking to value the company stock, provide underwriting services, conducting roadshows to stimulate potential buyer interest, and help sell shares to the public.
This is the nonbanking financial institutions and that includes a number of companies that provide financial services, which include insurance companies, financial research firms, venture capital firms, brokerages, investment funds, pension funds, private equity firms, and so on. The services provided by these firms differ from each other but are collectively referred to as financial services. The main function of the financial services firms is managing investor’s money and assets by predicting the movements and changes in the market and making investments that increase the investor’s return on investment and help accumulate wealth. Examples of services provided by some of these financial firms are as follows. Insurance companies – provide coverage against a predicted future crisis for a fee known as premium. Hedge funds – Pools of money collected from wealthy investors that are managed in a manner that increases investor wealth. Financial research firms – provide large corporations analysis and insight into investment decisions.
DIFFERENCE BETWEEN BANKING AND FINANCE
The services provided by the banking sector and non-banking sector(finance) both involve providing investors avenues for managing their wealth in a manner that involves lower risk. The main difference between banking and finance (non-banking) financial institutions is that non-banking financial institutions cannot take deposits from customers as traditional banks do. Banks provide services that include accepting deposits, giving loans, and securities underwriting and offering shares to the public. Finance companies provide a much larger range of services than banking institutions, which include asset management services, insurance services, financial research facilities, etc. The institutions under the banking industry are subject to much more stringent regulations compared to the financial services firms.
Finance is generally related to all types of financial, this could be accounting, insurances, and policies. Whereas banking is everything that happens in a bank only. The term Banking and Finance are two very different terms but are often associated together. These two terms are often used to denote services that a bank and other financial institutions provide to its customers. Banking and finance are also referred to as a term of managing your money by investing it in either banks or other financial institutions. It is very important that you invest your money in case it is sitting idle. By investing your money, you have a high chance of making a profit on that money and you would be doing the country proud by investing as that money will be used for the betterment of the country and it will be returned to you after a fixed period of time along with the interest whenever you set the time limit.
In a nutshell: Banking vs Finance is as follows
• The banking industry is highly regulated and is subject to stringent laws, rules, and requirements than the financial services industry.
• The main difference between the two is that banks can obtain deposits and financial services firms cannot.
• The services provided by banking and non-banking financial institutions help investors manage their wealth in a manner that allows them to obtain better returns.
• Financial services firms offer a larger range of services than a bank such as an asset management services, insurance services, financial research facilities, etc.
BENEFITS OF STUDYING BANKING AND FINANCE
Long term career plans
Having a well regarded financial institution on your CV is looking upon being favorable by employers - and not just by those within the sector. If you have managed to get through a tough application process and spend a good few years excelling with a reputable company, then future employers will want you in their organization. Furthermore, the structured graduate training and the knowledge of the sector are well-regarded. So whether you decide you want to move into a different industry, move laterally within the banking and finance industry (for example from banking into private equity), or harbor a goal to set up a business on your own, your experience will stand you in good stead.
Professional training & development opportunities
Working in established banks and businesses which have been tried and tested throughout the banks' long history gives you the opportunity to benefit from structured training and development opportunities. At the same time, depending on the route you take, you'll also be able to obtain a professional qualification as you advance in your career.
Salary and Bonuses
Big banks usually offer a wealth of other benefits including private health care, insurance, subsidized travel, food, and gym membership. Great benefits are not just the preserve of the banking and finance sector, but what makes the remuneration in this industry stand out is the opportunity for substantial and lucrative bonuses. While on one hand bonuses are a political hot potato, they are ultimately a major draw for many a candidate and a key incentive for why so many people work exceedingly long hours during the week - and weekend.
JOBS IN BANKING AND FINANCE
The following are jobs in banking and finance.
Accountants analyze, plan, evaluate, and advise on matters of accounting theory and practice. A bachelor's degree in accounting or a related field is usually required, but those with a master's degree or experience to boot will have better job opportunities.
Auditors examine and analyze accounting records and prepare financial reports for clients. Auditors usually need a bachelor's degree, but as with accountants, experience and advanced degrees increase their chances of getting hired.
Bank tellers cash checks, accept deposits and loan payments, and process withdrawals. They also may sell savings bonds and travelers' checks, accept bill payments, and process paperwork. Most tellers have at least a high school diploma, but people with bachelor's degrees in business, accounting, or liberal arts may get jobs as tellers to break into banking with the hopes of being promoted.
Treasurers direct an organization's financial goals, objectives, and budgets. Their duties may include overseeing the investment of funds and executing capital-raising strategies. Employers require a bachelor's degree in accounting, finance, economics, or business administration; however, employers increasingly are placing emphasis on advanced degrees in these fields.
Financial analysts work for businesses to help them or their clients make investment decisions. Analysts must have a bachelor's degree, often in business administration, accounting, statistics or finance, analysts with a master's degree in business administration will find themselves among the most desirable employees.
Personal financial advisors use their knowledge of investments, tax laws and insurance to recommend financial options that help individuals meet their short- and long-term goals. Advisors with a bachelor's degree in accounting, finance, economics, business mathematics, or law will have the best opportunities for jobs in their field.
Loan officers assist individuals and organizations in applying for loans, assess the individuals' creditworthiness, and help them determine the most appropriate type of loan for his/her needs. Employers usually require loan officers to have a bachelor's degree in finance, economics, or a related field. Loan officers will find experience in banking, lending, or sales and knowledge of computers to be huge assets in their job search.
Collectors keep track of accounts that are overdue and attempt to collect payment on them, making computer literacy and good communication skills a must in this job. Most collectors are required to have at least a high school diploma; however, employers prefer workers who have completed some college or who have experience in other occupations that involve contact with the public.
Buyers buy the goods and services a company needs either to resell to customers or for the establishment's own use. Educational requirements vary with the size of the organization, but many manufacturing firms prefer applicants with a bachelor's or master's degree in engineering, business, economics, or one of the applied sciences.
Budget analysts provide analysis and assistance to help companies develop their annual budgets, decide how to allocate current resources, and estimate future financial requirements. A bachelor's degree – often in finance, economics, accounting, business, statistics, political science, or sociology – is the minimum requirement for most employers, but an advanced degree is often preferred and sometimes required.
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