By Emayeneme Gbemiye-Etta
There used to be a number of distinct differences between traditional banks (pestle and mortar and online banks but with the expansion of services traditional banks now offer online these differences are shrinking in some areas as far as services are concerned. In fact, these days, people think of online banks as being no different from traditional banks, rather they think of online banks as what is termed online banking, where they are able to do the transactions they did going into a bank, online, but there is a distinct difference between online banking and online banks.
One major difference between online banks and traditional banks is that online banks offer their customers higher interest rates for their savings account because they do not have the cost of spending money for overhead and other expenses to maintain a building and physical presence.
- There is still the feeling by a lot of potential customers that Online banks are not safe because of the inherent view by people tat the banks because they are online are more vulnerable to hackers tan a regular bank. It has been shown b a number of cases that traditional banks can also be attacked by hackers.
- Another difference is that in sending money to by wire transfer from e. an online account to a traditional account because of the way in which online banks send the information to a processing center it takes loner for tem one to be available in the other account tan went is process is done b traditional banks. It takes approximately once the process is initiated a couple of minutes to get to the other account.
- Makin deposits to an online bank may take a while because the deposits usual lave to be sent by mail to the processing center which will then take a few days. Though just like a traditional bank deposits made by direct deposit are available immediately.
- Except that one cannot go into a physical building, withdrawals for both banks at least by ATM is the same process except for charges may be a little bit higher for the person with the online account if they cannot find a bank with ATMs that does not share for using the ATM.
- Another major difference depending on a person’s preference is tat the do not have tat personal relationship wit their bank. The customer cannot walk into their bank and have that one on one personal relationship. On the other hand a lot of people these days still do a lot of their business transactions online and do not o into the bank anyway for tat type of service. This does not mean that provides less customer service.
Banking on your phone is smart
As the fortunes of the world rebound, today’s economy proves to be a wonderfuly exciting time to be in charge of a large financial institution. Bank executives should be ecstatic about the task at hand; currently speaking, industry wealth has saturated the financial institutions, and it just so happens that there’s a growing trend of techno-savvy consumers who are freakishly eager to embrace new gadgets and technologies, instead of getting motivated about learning how to incorporate new tools instead of their ever-evolving super-sophisticated smart phones/ mobile devices.
People want to make deposits from across the street
According to Red Gillen, a Celent analyst, every bank that he’d spoken with had reported that their adoption numbers exceeded expectations. A few notable statistics found in a recent research study by mobile tracking vendor Sybase 365 included: 67 percent of Americans who claim tat they prefer to be in constant contact; 69 percent report they use SMS; 39 percent expressed an interest in mobile banking, and another 32 percent would even change banks to take advantage of free mobile banking.
Despite the apparent American interest, the consumers of the US are lagging behind their European and Asian counterparts, who have adopted the widest range of mobile services that are theoretically available. This can be expected when considering how American banks weren’t very quick on the draw.
Perhaps the banks don’t want to progress the system? Weird.
The Federal Reserve is a private corporation
Despite the barrage of nuclear criticism that welted upon the Federal Reserve for its failure to prevent the financial crisis, the despised board may crawl away like a cockroach from under the foot of regulatory reform; somehow the bank – which is a private corporation mind you (think Federal Express – not really federal is it?) – has escaped with not just its bank overseer/ supervisory powers completely unaffected, but with a newfound level of authority to enhance their capacity to enforce them.
Currently, a swarm of bipartisans are fighting to regulate a large majority of the central bank’s authority, which initially extended well beyond just a 800 state-chartered banks, and onto another 5,000 more holding companies. The bill that would accomplish
Lincoln invented Greenbacks to fund the war; the central banks funded his opponents
regulatory reform was introduced by Senate Banking Committee Chairman Chris Dodd, and it effectively reduced the Federal Reserves authority to only the 55 biggest holding companies. His opponent, Sen. Kay Bailey Hutchinson introduced an amendment on Friday that asks to reverse the very provision that could force the Federal Reserve Company to actually do their job. The Republican from Texas is backed by Senators Bob Corker (R-Tenn) and Jon Tester (D-Mont; so, is he really democrat?), plus nine co-sponsers, all striving to keep the Federal Reserve’s and in the pockets of smaller institutions.
Has American learned her lesson, or is everybody going to let business continue as usual?
As some jump for joy over a receding recession (depression), market watchers wonder why regional bankers are prematurely celebrating. The minor detail generally missed concerns loan-to-deposit rations; in other words, a way to indicate how much a bank depends on external finances coneys a free fall as more consumers save, and regional banks loan out less.
Executive by the likes of KeyCorp, Marshall & Ilsley Corp. and First Horizon Nation Corp. may stand by claims that the falling ratios of yester-quarter fostered a boost in margins and liquidity, but objective analysts see straight through the garbage. They drew attention to the fact that a such trend indicates weak lending, and deposits headed toward less-profitable alternate routes.
Regional banks celebrate to the market watcher's dismay
In a nutshell, more money has gone in to regional banks than out, which has rendered them saturated in liquidity, desperately scrounging juice margins by slashing rates on checking and savings accounts. The fact is that banks aren’t giving anybody loans; in conjunction with unemployment and widespread household vacancies, the prospects for consumer and commercial growth are insubstantial.
The chief investment officer at Point View Financial Services Inc., David Dietze, tied dreadful consequences to the plummeting ratio, which could drastically affect the economy: “over-saving and under-lending can lead to deflation.”