Gone are the days when banking services worked in a niche domain, obtaining deposits and lending money on interest and providing personal and business account services to people.
Banks stopped being satisfied with that when they realized that the Internet revolution could provide them a very viable platform to launch a diverse blend of financial services globally to whomsoever required them.
Although extending credit to people and soliciting deposits from clients still remains bread and butter for banking services the world over, they have diversified today into several different sectors. What has happened in the last three decades due to the technological revolution in equipment, computerization, and secure transactions over the Internet is that it has opened up a host of hitherto untapped possibilities for banks.
With servers holding all account details and with cash counting machines to the fore bank employees have been freed of the traditional manual ledger system of entry of credits and debits. While technological innovations such as Internet access of bank accounts have made the job of bank employees easier and provided them spare time, database access technology has made them easily search for those accounts which are holding a lot of cash on deposit interest rates.
With investments in mutual funds outperforming bank deposit returns consistently over a number of years now, banking services have turned towards providing investment consultancy services to their high net worth clients. Not only banks can tap the potential of high net worth clients better than the mutual funds themselves, they can better advise their clients as to which mutual fund scheme to invest their spare money lying dormant in bank accounts.
A number of insurance service providers have opened joint ventures with banks to accelerate the task of increasing the insurance umbrella over bank account holders. Under the aegis of such collaborations, bank employees request their clients with whom they have personal interaction to invest in good insurance schemes with even equity benefits. The insurance company provides commission to banks to provide such services.
Another effect that globalization of banking services has spawned is in money transfer services across the world from one country to another to clients of banks. Today banking services have become truly multinational on a large scale and providing such money transfer services quickly over the Internet has become the done thing for banks at a very competitive rate of commission.
A number of small business enterprises especially in rural locations had traditionally been bereft of the lending support from banking services. Today this has changed magically with the reach of banking services extending into every nook and corner of a nation.
With the technological revolution not sparing the corporate sector in its wake, even imports have been facilitated faster by use of Swift transfer of monies through banking services, replacing the much slower traditional letter of credit system adopted earlier.
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