Finance Recruitment: What is retail Banking?

Article by artavia.seo

People often think that all banks are the same and there isn’t any difference, but this is far from the truth. The basic theory behind banks is that they rely on transforming money. This can be transforming money between people through, cash, cheques or card payments. The other transformation that they provide is using time. Banks are essentially time machines and they do this by taking short term savings from people and use them to help people with long term purchases. For example if you put £800 in the bank to save for a summer holiday, this can be used to fund someone’s mortgage months down the line. A retail bank will tend to focus on payments, short term loans, money management, savings, long term loans and mortgages. But not all retail banks are the same, they generally are split into to groups; Firstly Building Societies and Mortgage Banks and Secondly Clearing Banks.Mortgage banks and building societies are the simple types of banks in that the offer standard services. The purpose of building societies was to originally take deposits and then lend out money for mortgages. They typically sued to have limited account services and management services. Originally owner by the people who saved with them, many building societies are now commercial and stock market listed banks. They can now offer more services and offer current accounts that compete with traditional banks. Banks that fall into this category include Nationwide, Bradford and Bingly and Alliance and Leicester. The second groups of banks are clearing banks or universal banks are they are sometimes known. These are much larges than mortgage banks and building societies. They have direct access to the payments network that the others did not used to have. Traditionally these were the banks that people would have current accounts with and would take loans from. They were known as clearers due to the fact they cleared cheques. These banks are known for offering a larger range of services than the others as people used to manage money through them. It is interesting to see that while mortgage banks and building societies have moved into the clearing bank markets, the clearing banks have moved into offering mortgages over the years. The largest clearing banks are Barclays, HBOS and Lloyds TSB. For a more diverse range of finance jobs and career prospects, Clearing banks are better as they now pretty much offer every service available in banking. There are obviously great job opportunities in both areas of banking, but it is worth noting that if you choose a job in smaller mortgage bank, then your role will be more rigid than if you had the same job in a clearing bank. But on the other hand, while there might be more opportunities in clearing banks, some people will prefer the more manageable structure of the smaller banks which make it easier to work your way up the career ladder.

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