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Services of Banks: Offering the Comprehensive Services of Banks

A bank is a financial institution and is regulated by the Financial Conduct Authority in the UK, and the Federal Reserve (in the US) to protect depositor’s assets. Banks are licensed to provide financial assistance such as opening a bank account for customers savings, borrowing, earning more money through investments, and insurance. The idea of banking had been established around 1,800 BC in Babylon, and depositing, changing, and lending of money had been made by moneylenders. During these early times, temples were considered the most secure place to store assets. Although, when the Roman Empire hit a financial crisis that caused their economy to collapse, banking ended. It came back in the 12th and 13th centuries in Italy. The first and oldest bank is known as BMPS or “Banca Monte dei Paschi di Siena” and was opened on March 4, 1472, in Siena Italy. Centuries had gone by and banks still had the same purpose in helping customers save and borrow. The institution is truly beneficial to every customer. Banks have a variety of products and services that would fit to whatever a person needs. 

There are also free services that a bank offers, such as opening an account, depositing, and withdrawal of money in their automated teller machines (ATMs). Using a bank also makes customers’ lives easier as they can manage and track their savings. Moreover, managing a bank account has become more convenient, as everything can be handled online, such as savings deposits, balances, and other transactions. Banks are important because they help people manage their wealth and provide them with assistance when needed. Money is created through central banks that help with the transmission of monetary policy for the development and growth of the economy.

Services of Banks: Offering the Comprehensive Services of Banks

Listed below are services of a bank that are offered to its customers:

  • Credit Cards: A credit card is provided by the bank that can be used by the customer using the bank’s money. 
  • Online Banking: Online banking is a system where customers can access their bank accounts using online platforms.
  • Debit Cards: A debit card is a card that can be used directly from the customer’s savings account. 
  • Overdraft: An overdraft is when the bank lets its customer have an agreed revolving credit facility on their bank account. 
  • Bank Guarantee: A back guarantee is a financial safety net provided by a lending institution.
  • Consultancy: Bank consultants are financial experts that can help customers with their financial decisions.
  • Mobile Banking: Mobile banking refers to using a mobile bank app to carry out transactions.
  • Collection and Payment of Credit Instruments: Collection and payment of credit instruments pertains to an agreement between the lender and borrower. 
  • Private Banking: Private banking is a service that is offered to individuals with high net worth.
  • ATMs: An ATM is an automated machine where a customer can check their account, transfer money, and withdraw cash.
  • Foreign Currency Exchange: Foreign Currency Exchange is a process of converting money into another foreign currency.

1. Credit cards

A credit card is a card service provided by banks that allows the customer to purchase goods using the bank’s money. Each of the customers has a limited and pre-agreed credit limit on the card. Cardholders are required to pay the exact amount they have borrowed to a certain time given. However, when the debtor cannot pay their monthly payments, they will be charged interest rates. It will guarantee that cardholders will pay on time and will avoid bad credit. The features of a credit card are, customised limit, EMI purchase, rewards, and easy approval of loans. Credit cards can also be used for withdrawal of money and improving credit score. However, despite its benefits, they come with a  risk that a cardholder must consider. The most potential risk of having a credit card is overspending. When a customer is carried away with access to credit and cannot repay it, it damages their credit history.  Additionally, credit card fraud is another potential risk that must be considered. If customers are not careful, it will result in overspending and debt. Using credit cards in a safe and responsible manner is relatively low risk however.

2. Online banking

customers can conveniently manage their bank accounts with online banking. Mobile banking can be accessed via a device connected to the internet or through a mobile banking app. When using online banking, consumers can save time visiting physical branches and waiting in line. Online banking has the advantages of saving time, and offering quick, simple transactions. customers can keep track of their transactions, transfer funds, and pay bills online. However, there are risks associated with online banking. Online exposure of bank information, such as customername, account number, and password, can result in lost funds. Additionally, cash deposits are not possible on the platform. Online banking provides the most convenient platform for banking.

3. Debit cards

A debit card is a plastic card from the bank that contains the Cutsomers details and allows them to transact, make payments and withdraw cash. Debit cards have plenty of partners with major card companies including Mastercard, VISA, American Express, and Discover. When the debit card holder uses their debit card, the funds are automatically deducted from their account. However, there are some risk when having a debit card. The main risks include overspending that might result in overdraft fees. Individuals choose to get a debit card because it allows simple access to their funds, wherever they are.

4. Overdraft

Overdraft refers to borrowing funds from the bank at an agreed interest rate. This usually happens when the customer needs to withdraw or purchase something which costs more than the amount of funds held in their account. When a customer gets approved for an overdraft, they will be given a credit limit. It is beneficial as back-up money for emergencies and financial crises.

5. Bank Guarantee

A lending institution, such as the bank, will offer a bank guarantee as a form of financial insurance. Bank guarantees are an undertaking to cover a debt or risk on a transaction. Bank guarantees support companies and organizations for big transactions to prevent delays and failed payments. Its features include the duration of the bank guarantee, its amount, and purpose. A bank guarantee is beneficial because it reduces financial risk, has small fees, and increased credibility. A bank guarantee has disadvantages as well. Banks are strict regarding evaluation and require collateral for their security. To get a bank guarantee, a borrower should be responsible and confident that they can pay the amount in time.

6. Consultancy

Banking consultancy is a service provided by the bank for its customers. Banks have financial experts that can give financial advice to customers who needs a financial decision. Customers can get advice on banking services and insurances. Having a consultant is both beneficial to the customer and the institution. With their expertise, consultants can help customers invest their assets and avoiding financial mistakes. However, there are risk associated in consultancy. The risks include, miscommunication, financial limitations, and strategic issues. It is important that the client and the consultant have good communication to be able to work together. Consultants are beneficial to the customer, especially if they have little knowledge on how to manage their assets.

7. Mobile Banking

Mobile banking is a convenient way for the customer to manage their bank accounts. Banking can easily be done from the comfort of a customer’s home. It is accessible using a mobile device connected to the internet and has an app of a specific bank of the customer. Online banking enables the customer to open and manage their account, transaction, pay bills, and transfer money. The benefits of mobile banking include, immediate access to your bank account, quick and easy fund transfer, and simple loan applications. However, it also comes with a risk. When customers are not careful, their mobile phone could be infected by malware that could steal bank information. Mobile banking is beneficial for everyone if used correctly and responsibly.

8. Collection and Payment Of Credit Instruments

Collection and payment of credit instruments referred to a written document. It serves as a record of the agreement between the two parties on cashless withdrawal and deposit. It could be a pledge to repay a loan or an order to pay back a specific individual using bills of exchange, checks, promissory notes, bank overdrafts, etc. However, the most utilized credit instrument is the check. Debtors can easily pay their debt using checks, and it is hassle-free. Using credit instruments is beneficial to the bank and creditor. The document will serve as a collection of payment from debtors and facilitate transactions. However, if the debtors fail to pay, the value of their debts will decrease and will fall into default. 

9. Private banking

Private banking is a service bespoke banking to individuals with a high net worth. Its service is personalized and mainly for big clients that have a starting worth of £750,000+ in investable assets. Private banking services include opening current accounts, personal service and  managing transactions. Also, private banking is beneficial to eligible clients as it offers discounted services, higher annual percentage yield on their security products and lower annual percentage rates on borrowing.

10. ATMs Services

ATMs or automated teller machines are a tool that allow a customer to transact on their account remotely . It has services that are convenient for every individual who has a card from their specific banks. ATMs work by inserting the card into the machine and inputting the pin code. Furthermore, they allow customers to check their savings account, withdraw money, transfer funds, deposit cash, print recent transactions, and change their pin code. These features are the basic banking needs of an individual.

11. Foreign Currency Exchange

The process of converting one currency into another is known as foreign currency exchange. Due to market forces of supply and demand, conversion rates for almost all currencies are continually fluctuating. Several currencies can be exchanged at a local bank. Customers who are traveling benefit from exchanging currencies.

What are the advantages of bank services?

There are a lot of benefits a customer could get from using a bank. It offers services and products that can help an individual deal with financial management. Customers can easily open an account without a fee and have a lower rate of maintaining the account. Using a bank can also guarantee the safety of assets. Banks have safety deposit boxes that a customer can use to store important documents.. It gives financial assistance to improve their customers’ living situations. However, its services are not limited to individuals. They also provide assistance to businesses, industries, and agriculture that can help improve the economy of one’s country.  

How do I choose a good bank?

Listed below are the factors on how to choose a good bank.

  • Security: A bank should be under the protection of Financial Services Compensation Scheme to guarantee the safety of their funds. 
  • Ease of transactions: Easy and fast transactions are also important in finding a bank. Banks should have good customer service.
  • Fees and interest rates: Fees and interest rates should be taken into serious consideration.

Do all banks have the same services?

No, banks have different services to offer. All banks are unique and have different purposes and customers to serve. It is important to understand what a bank is to fully benefit from it.

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