A Guide to Online Banking Safety

71% of bank customers regularly use online and mobile banking options. However, many people do not completely trust online sources and may worry about their information being stolen when choosing an online bank. 

Are you looking for ways to protect information and improve your data security? Keep reading these tips for online banking safety to learn more!

Don’t Use Public Wifi or Computers

One of the most important online banking safety tips to keep your information secure is to only sign in on your personal network or device. When you use public wifi that many people have access to, you never know who will be able to see your browser history or password. 

This is also true for public computers. If you were to accidentally save your password for your online banking institution, it would be easy for a complete stranger to access your bank from the same computer. 

To avoid these potential disasters, it is always best to use your own devices and your own wifi network whenever you have to log into a password-protected website. 

Scan Statements for Fraud

While you want to do everything you can to prevent fraud, it is also important that you are able to identify any fraud as soon as possible. 

One way that you can do this is by regularly scanning your statements for fraudulent activity. Check your bank statement for any purchases that you do not remember making. 

While banks do their part to identify fraud, some purchases may not stand out to them. By looking for fraud in your own account, you may be able to catch suspicious activity. 

Use Anti-Virus Protection

Next, it is important that you protect your devices with anti-virus protection. This can keep you from getting attacked by any viruses or malware. 

Most computers come equipped with some type of anti-virus software, but you want to be sure that you frequently update it for the best protection for your computer. 

Understand Common Scam Techniques

Something else you can do to protect your online banking information is to recognize and understand common bank scam techniques. Scammers will frequently use the same tactics to gain access to your information, so understanding these will prevent them from targeting you. 

One common scam technique is sending you links in an email. While the email may look legitimate, you may find that clicking on this link may lead to a virus or bug on your computer. 

To avoid this scam, it is always best to re-type the URL to your banking institution rather than clicking on a link. 

Your bank will also never request your private information over the phone or over email. If anyone is asking you for information to gain access to your account, you should hang up and call your bank directly. 

Regularly Update Passwords

Many people will re-use the same password for many different websites. However, if someone guesses your password for one website, they may try using the same password on another website.

This is why you should always make your banking password unique from other websites. 

The easiest way to combat keep people from guessing your password is to update and change your passwords regularly. Typically, it is best to change your password once every few months.

Then, anyone who had access to your account will be kicked out with the new password. 

You should also be thoughtful about the types of passwords you use. If you make them one word or if your password is something easy to guess, like your name, people will easily be able to gain access to your account. 

To make your passwords more secure, you should make them a long password with multiple words, numbers, or special characters. 

Sign Up For Text Alerts

If you want to make it easier to identify any fraudulent purchases, you can always ask for text alerts from your online bank.

Banks can send you emails or texts whenever there are large transactions made from your account or if your balance drops too much. 

If you notice that you didn’t make a purchase or transfer money from your account, you can immediately call your bank to stay protected from fraudulent activities. 

Carefully Choose Your Bank

Finally, it is important that you do plenty of research to find the best online bank. If you know that you can trust your bank, you know that they will do anything to protect your assets and information. 

Make sure you check online reviews for banks and you understand your banking needs before you make a decision. You should also prioritize finding an institution with high security to prevent data leaks or hackers.

For example, things like multifactor authentication make it much more difficult for people to gain access to your account without your knowledge.  

If you want to learn more about choosing a bank, check out this article on factors to consider when choosing a bank. 

Improve Your Online Banking Safety Today

You can easily improve your online banking information when you focus on data security. By following each of these banking safety tips, you will not have to worry about fraud, scams, or any other data leaks. 

However, the most important thing you can do to improve your online banking safety is to choose a reliable and trustworthy organization to work with.

Make sure you choose the best online bank so you can be confident in your banking!

Do you want to learn more about online banking and other safety tips? CFI.co can help! Check out our articles on finance and banking to learn more helpful tips. 

3 Questions You Need to Ask Yourself When Buying Your First Car

3 Questions You Need to Ask Yourself When Buying Your First Car

Buying your first car is an exciting milestone that promises a great deal of added freedom, but before you can enjoy yourself, you need to know how to handle the car-buying process as a first timer. Below are three of the most important questions you must ask yourself to ease your first car purchase.

1. What’s My Budget?

When it comes to buying your first car, budgeting is one of the most important factors. In all likelihood, this is one of your first major purchases, so you need to be smart and strategic about it.

Be realistic when setting your budget for the car itself. Think about your income as well as your current expenses (e.g. rent, phone bill, tuition costs). Then, consider how much money you’ll have left over each month and how soon you need a car. Figure out how much you can save up within that designated period of time and go from there.

When crafting your budget, you’ll also need to consider other expenses on top of the vehicle itself. For instance, think about car insurance and how much it will cost you on a monthly basis. To get a better idea of these expenses, try to get some online car insurance quotes from a few different providers. With this knowledge, you’ll be better able to take control of your money and make it work for you.

2. Is There a Brand or Make That Suits My Lifestyle the Best?

Consider what purpose you want this vehicle to serve in your life. Do you want something that is compact and easy to drive, especially around the city, or do you want a car that’s more spacious for long-distance road trips?

Based on the answers to these questions, you should be able to find the right car for your lifestyle. If you prefer a smaller car that’s easier to handle, you might like a Nissan Versa, a Toyota Yaris, or a similar model of car. On the other hand, if you want something roomier with lots of room for your friends, an SUV such as a Ford Explorer or a Hyundai Santa Fe might align with your needs a little better.

3. Will I Drive Manual or Automatic?

This is another important consideration you need to keep in mind when buying your first car: manual vs. automatic. If you only know how to drive automatic, then the answer to this question will likely be a bit easier for you. However, if you drive manual, you have more choices.

Many people find manual cars trickier to drive in stop-and-go traffic. If you plan to do a lot of city driving, you may be better off with an automatic. However, some drivers prefer the amount of control you have when driving a manual. If this sounds like you, a manual car could be a great fit.

If you’re in the process of buying your first car, self-reflection is an important ingredient in making the right selection. By asking yourself these questions, you’ll ensure that you pick the best car for you.

Money in the USA

Money in the USA

Taxes

Nearly all working U.S. citizens are required to file their income tax returns with the Internal Revenue Service (IRS) each year. Everyone in the U.S. has a Social Security card, which helps record wages and income for tax purposes.

The main types of taxes are FICA and income tax (not to be confused with Payroll Tax). If you are in business, you need to be well versed in this, information to learn about the types of taxes available on this blog post.

FICA includes a Social Security tax and a Medicare tax on the health insurance program for the elderly and disabled. The Social Security tax is 6.2% and is paid only on income up to $132,900 a year; Medicare is 1.45% and is charged on all annual income.

As for the income tax, the tax rate rises with income and ranges from 10 to 37%. The federal income tax system in the states is progressive. The amount of tax differs depending on whether you are single, married, or head of household.

Medicine

There are both public and private medical clinics. The public clinic will ask about your income level when you fill out the form. If your income is less than $1,000 per month, each visit to the doctor will cost $35, to be paid immediately at the time of the visit. Tests can be paid in installments.

At a private clinic, the standard cost of a doctor’s visit in the absence of health insurance is $150. Things are more complicated with dentistry: it is much more expensive. It costs $200 to $500 to $500 to $500 to $1,000 to fix a tooth and $500 to $1,000 to put a crown on.

Loans

In our country it is very important to have a good credit history, otherwise, they will not rent a house and may not even be hired for a prestigious job.

It is interesting that most average American families live “in debt” and take out loans even for small purchases.

Credit histories are being scrutinized now, especially after the 2008 crisis, but if there are no problems with that, getting long-term loans with minimal interest and a fixed rate is relatively easy.

Housing

Approximately one-third of one’s income is spent on rent or mortgages, utilities, and home improvements.

The approximate cost of renting a 2-bedroom apartment in Florida is $1,200 to $3,000 a month, depending on the city and the area. Lodging most often rents without furniture.

The cost of buying a property is from 200,000 and up, depending on location and size.

Nutrition

Food is the third most expensive item in most Americans’ budgets. This spending varies by social and marital status and state of residence. For example, in California, Florida, and New York State, people spend about the same on meals “outside the home” and “at home,” while people in the central states prefer to eat at home.

Transportation

A bus ride costs $1.30 to $2.25 depending on the route; a subway ride costs $2.25. There are special prices for low-income people. It is also possible to save a little money and buy a bus pass.

Florida, like most states, has an underdeveloped public transportation system, so the main way to get around is by car.

Conclusion

·         Being law-abiding is very important. Paying taxes on time is sacred.

·         Every second invests in the U.S., preferring safer and more traditional investment instruments.

·         Medicine is expensive here, but you can always buy insurance or pay for medical services in installments.

·         Housing and transportation costs consume a large part of the budget.

·         Many Americans traditionally take out loans for housing, cars, starting businesses, and other needs.

Is Credit Repair Good or Bad?

You’re ready to make some major moves in life that require the best credit report you can muster. Well, you now have decisions to make. To wit, you can try to shine up your credit yourself or you can hire a credit repair agency. But is credit repair good or bad? Let’s take a gander.

Is Credit Repair Good or Bad?

The Issue

It’s difficult to move forward with too many negative marks on your credit reports, so it’s understandable that you’d want them removed. However, what you need to know is that, if you have the time, patience, and persistence, there’s nothing a credit repair agency can do that you can’t. 

However, if the unfavorable items on your reports are accurate, they technically cannot be removed, and if you wait, they’ll fall off naturally in due time. Now, some companies can sometimes gum up the works to such an extent that the negative entry is extracted. However, this is a poor strategy and hardly ever works.

Let’s take a holistic look at credit repair.

Just What is Credit Repair?

At its essence, it’s hiring a credit repair organization to get info expunged from your credit reports. Most such firms tout themselves as being able to help you make unverifiable or incorrect info on your credit reports disappear. 

The real deal, though, is that most companies try to also get negative, albeit correct, data off your reports before they, at length, drop off by themselves. Check out lexington law reviews to see what’s said about that leading credit repair company.

How Do I Know I’m Getting a Legit Company?

That’s a good and proper question, since scams abound in this industry. There are bad actors out there who seek to take advantage of existing financial and emotional vulnerabilities of people like you. The good news is that you’re protected by the federal Credit Repair Organizations Act, which sets forth what credit repair agencies can and cannot do.

For example, such companies may not:

  • Counsel you to make erroneous statements to the top credit reporting agencies: Experian, Equifax, and TransUnion.
  • Suggest that you alter your identity to block the credit reporting agencies from linking you with what’s on your credit reports.
  • Charge you up front, before they’ve performed services on your behalf.
  • Guarantee that it can get info from your reports removed.

Likewise, credit repair outfits are required to disclose to you the following:

  • You do have the right to, for free, dispute information in your credit report.
  • You can file a lawsuit against it if it breaches the Credit Repair Organizations Act.
  • While it will do its best to act reasonably to make sure the info on your reports is correct, mistakes are sometimes made.

How Much Does Credit Repair Cost?

It depends on the company, but credit repair companies generally either bill you at month’s end for services rendered during the past month or charge you per delete.

With the former, a kind of subscription service, you can expect to pay $50 or $100 monthly. Here, such companies are incentivized to keep you around for as long as possible. With the latter, “pay for delete,” the company doesn’t bill you until it gets an item removed.

So, is credit repair good or bad? The answer mostly depends on what you truly want. If you’re looking to have inaccurate or unverifiable information removed from your credit reports, but aren’t inclined to tackle the task yourself, then, sure, hire a firm. However, paying a company in hopes that, somehow, it can get adverse but accurate info removed is frankly a fool’s errand. If you can’t wait for the item to drop off by itself, perhaps you need a different financial strategy. 

3 Benefits of Using a Stock Screener

Photo Credit: Chris Liverani (Unsplash)

Investing in the stock market is a great way to make an additional income and save for the future. Regardless of what you may have heard, playing the stock market is by no means a get-rich-quick scheme. It requires a lot of hard work and dedication. Some people opt to pay a broker to invest money on their behalf but if you really want to make a long-term pursuit of this venture, you’ll need to do the groundwork yourself. You’ll need to invest a lot of time reading about stocks and strategies, while keeping a constant eye on the market to spot the trends

While it might feel overwhelming, especially for novice investors at the start of their trading journey, there are now plenty of tools that have been developed to make trading that little bit easier. One such tool is a stock screener, which allows you to trade through available stocks and can be tailored according to your investment criteria. 

In this post, we’ll examine the main benefits of using a stock screener and how it can help you get your investment journey off on the right foot: 

It Saves Time

There are thousands of stocks listed on the market, which can make screening them a tedious task. You’ll need to study the financial history of each stock in detail to evaluate its performance over time as well as its prospects for the future. This is no straightforward task. Thankfully, stock screeners help narrow down your stock options by filtering stocks according to your investment objectives. Whether you are looking for stocks with a low-level P/E ratio or those that are undervalued, a good screener will help you find your options faster. 

It Can Prevent Emotional Decisions

A mistake that many investors make when playing the stock market is that they make decisions based on emotion rather than being driven by objective research. Emotionally based decisions are often illogical and can have a negative impact on your returns. Tools such as WallStreetZen’s stock screener eliminate investor biases that fuel bad decisions and filter stocks based on sound parameters. 

Helps You Discover New Investment Opportunities 

Even the most passionate investors can’t possibly know everything about stocks. This is because the market is extensive, and there are always new developments occurring, which can be challenging to keep track of. By trawling an extensive database of stocks to find those that meet an investor’s specific criteria, a good stock screener will draw your attention to new stocks that you may not have known about before. It may present the opportunity to invest in unpopular stocks with investment potential that may have been overlooked. 

Getting acquainted with the stock market isn’t easy. Not even the most experienced trader can always stay ahead of market trends. However, using tools such as stock screeners to your advantage will undoubtedly serve to make the whole process much more efficient. Spend some time finding yourself a reputable stock screener and learn to use it effectively to reap financial rewards on the stock market. 

Commercial Banking vs Retail Banking: What’s the Difference?

The global market size for financial services is expected to reach an astounding $22.5 trillion in 2021. That figure will climb to $28.5 trillion by 2025.

Among the biggest players in the financial services industry are retail and commercial banks. Both types of institutions are of critical importance to both the domestic and global economies.

But exactly what is retail banking, and how does it differ from commercial banking? If you’re asking this question, you’ve come to the right place. This post sheds more light on the commercial banking vs retail banking discussion.

What Is Private Banking?

The terms retail banking, private banking, and consumer banking are often used interchangeably. They refer to a division of banking that handles retail customers. 

Retail banking focuses on dealing directly with clients located in a close city or town. The retail bank handles much of its activity face to face, in a manner clear and visible to the client.

Given that retail banks serve many clients with a multitude of transactions, it’s referred to as mass-market banking.

Note that retail banking doesn’t solely depend on physical locations. The term simply refers to the business model followed. Simply put, retail banking operates on relatively small or medium-sized transactions.

Thus, many retail banks allow their clients to enjoy the benefits of digital banking by providing online banking services.

The most important source of funds in retail banking is customer deposits. The bank makes a profit through service charges and fees. The institution also earns income from the interest they charge when they lend out money to clients. 

What Is Commercial Banking?

Now that we’ve seen the retail banking definition, it’s time to look at another popular type of banking: commercial banking. Also known as corporate banking, commercial banking provides services to businesses and governments. 

Generally, these are stocking corporations that make money by acting as financial intermediaries

Corporate banks tend to have physical locations from which they offer their services. In the recent past, however, these institutions have been increasingly operating online. 

Commercial Banking Vs. Retail Banks: The Main Differences

Retail and commercial banking differ in several important ways. Let’s take a closer look at some of these differences.

Services Offered

Both types of banks provide a large variety of services to their respective clients. Retail banking clients can expect these services:

Checking and Savings Accounts

A retail bank allows its customers to open checking and savings accounts. Once you open a checking account, you’ll be required to pay a monthly fee. 

With a savings account, you earn a slightly higher interest rate. However, you cannot have checks written on the account.

Mortgages

Retail banks also offer different mortgage loan types to their clients. These loans are meant for buying either residential or investment property. Generally, mortgages earn a substantial chunk of retail banking profits due to their size.

Auto Financing

Clients looking for vehicle financing can also talk to retail banks. The banks also provide refinancing for existing car loans.

Credit Cards 

Credit cards are one of the most lucrative sources of interest income for banks. That’s because this service attracts some of the highest interest rates in the industry.

There are, of course, many other services retail banking offers, but these are among the most popular.

Clients looking for commercial banking services can benefit from the following offerings:

Loans and Other Credit Products

Just like retail banks, corporate banks offer different loan facilities. Perhaps the biggest difference here is that the loans involved.

Corporate banking offers more substantial compared to those offered in retail banking. 

Treasury and Cash Management Services  

Corporate banking clients can also benefit from treasury and cash management services. Such services help clients manage their working capital besides meeting their currency conversion needs.

Equipment Lending 

Clients can benefit from customized loans and leases to acquire a range of equipment. Such equipment may be used in a variety of industries, including manufacturing, IT, and transportation. 

Other services offered by corporate banks include:

  • Trade finance
  • factoring
  • letters of credit

These are only some of the services offered by corporate banks. Corporate banking clients can expect to find a range of products they can use to meet their business financial needs.

Target Clients

There’s a huge difference between the clients of these banks.

Generally, retail banking focuses on individuals. Commercial banking is more concerned with corporate clients, from SMEs to large conglomerates. 

Volume and Value of Transactions

In retail banking, the volume of transactions is typically high. However, the value of transactions is low, given that the client base consists of individuals and small businesses. 

In contrast, the volume of transactions is much lower in commercial banking. The value of these transactions, however, is considerably much higher as the client base is typically made of sizable business enterprises. 

Product Customization

Generally, retail banking involves little product and service customisation. Most products are standardised, also referred to as off-the-shelf products. 

Things are different with corporate banking, customised where the products and services are highly personalised to meet the client’s specific requirements and preferences.

Commercial Banking Vs Retail Banking: Now You Know The Differences

Hopefully, the commercial banking vs retail banking conversation is clearer to you now. While the two banking approaches provide services essential to the economy, their target clients, volume and value of transactions, and service customisation levels are significantly different. 

We hope you enjoyed this article about the differences between commercial and retail banking. Are you looking for more information about finance? Check out our blog section for more content.

How Can Cloud ERP Solutions Help Manufacturing Businesses?

The manufacturing industry is super dynamic and highly competitive. There is continuous stress on manufacturers to adopt newer ways of conducting their business.

To run a successful manufacturing business, owners must focus on achieving multiple parameters such as,

  • Proper forecasting of customer needs
  • Right control over inventory
  • Efficient management of sales leads
  • Zero wastage
  • Optimised ROI

A cloud ERP solution like https://www.netsuite.com.au/portal/au/products/erp.shtml can handle manufacturing concerns efficiently. It can also aid in achieving the success parameters more effortlessly. Read on to find out how implementing a cloud ERP system can help your manufacturing business.

Enhanced Inventory Control

The ERP solution streamlines your supply chain and ensures customer demand is always met promptly. By using the supply chain management module, manufacturers can build optimised logistics strategies. With access to real-time data, there is greater accuracy in forecasting and lower inventory costs.

Improved Decision Making

The ERP solution represents a centralised view of all business operations. The central hub offers essential information about sales, customers, finances, labour management, etc. Stakeholders can make use of the data on a real-time basis to make an accurate decision. An ERP solution is the key to making perfect forecasting and budget plans.

Better Quality Management

Quality control is a critical aspect of any manufacturing process. The cloud ERP solution includes in-built features adhering to optimal quality standards. It improves process and product quality by maintaining related documents in the centralised hub. The documents include standards about manufacturing processes, audits, safety management, and employee training and management.

Better Data Storage

ERP systems eliminate the need for error-prone, redundant manual processes. With a sound ERP solution, your data is cleaned and processed efficiently. The data is then stored using the highest levels of security and privacy parameters.

Manufacturers can access the data from any location, using any device. The access controls are well-defined to ensure the optimal safety of data.

Optimised Customer Relationship Management

Manufacturing companies must stay connected to customers consistently and understand their impulses. The CRM module (customer relationship management) of the ERP solution ensures optimised customer satisfaction.

CRM improves customer response time. It helps the sales team to track and follow up with leads easily. It captures customer interactions from multiple sources and ensures that the customer is presented with the right product at the right time. 

Better Supplier Collaboration

The ERP system takes care of your supplier relationships too. With an enhanced internal communication system, your team is well-prepared to handle suppliers from any part of the world. ERP reduces response time, helps track down issues promptly, and aids in resolving the problems with proper damage control. 

Enhanced Revenue and Better Cost Control

An ERP solution can improve business revenue and help with cost reduction in multiple ways. Some of them are,

  • Automation of tasks leads to lowered labour costs.
  • Unlocking newer revenue streams by helping the business go digital.
  • Optimised inventory management that cuts down operating and administrative costs.
  • Better control over the quality of products makes business growth inevitable.

Cloud ERP System versus In-House Deployment

Some manufacturers believe that an in-house ERP system offers better control over their data and operations. This is, however, not true, and the cloud ERP solution is always the winner. Here are some of the critical benefits of a cloud system.

  1. Automatic upgrades
  2. Access to real-time data from any place and any device
  3. Lowered costs
  4. Saves more time
  5. A cloud-based solution is easily scalable
  6. Shorter deployment times

However, you cannot achieve the multiple benefits of an ERP system for manufacturing companies by simply deploying any software solution.

A trusted solution ensures 100% profitability and business growth.  Explore the critical modules of ERP solutions and find out the different ways it can help your business grow.

What Is Retail Banking Exactly?

Did you know there are over 6000 banks and financial institutions in the US alone? Each of them serves a different purpose concerning customers and the broader local and global economy. But do you know what makes a retail bank different? Knowing how they work can help you make better choices regarding your finances. Read on as we discuss everything you must know about retail banking.

What Is Retail Banking?

The retail banking definition is of a bank that provides financial services to members of the public and individuals instead of businesses. It is also called personal or consumer banking. 

They provide a range of services such as loans, personal accounts for checking and saving, credit cards, and mortgages. They allow people to deposit money and gain access to lines of credit. Retail banks may be local community banks or branches of larger banks. 

This is in contrast to a business banking service. These are only offered to small and large businesses and offer different services and rates. 

How Does a Retail Bank Work?

When a retail bank gets money from a customer deposit, it will use this to earn money. The deposit will be put toward issuing a loan, on which they charge interest.

Different loans have various rates and periods in which they need to be paid back. For example, a mortgage loan will be paid over a long period and have a lower interest rate–as it is a significant amount. On the other hand, credit card debt needs to be paid back quickly and has higher rates.

Banks will offer steady interest rates to tempt customers to keep their money in the bank. They will also get profit from transaction and service fees. For example, they may charge overdraft fees and maintenance costs on specific accounts. 

Types of Retail Bank

Retail banks can be broken down into two main types. These are commercial banks and cooperatives with credit unions. Though they offer many similar services, they do bear fundamental differences. 

Commercial Banks

Commercial banks offer all the services you would expect from a consumer bank, often providing a wide range of services. Interest rates are charged on loans, and transaction fees are taken to make a profit. They will generally have a broad interest rate spread during good economic times to make more profit. 

In downturns, they will lower rates to attract more customers. Using a combination of interest rates and banking fees, they turn a profit. This is given to shareholders, the key factor making it fundamentally different from credit unions and cooperatives. 

Credit Unions and Cooperatives

Credit unions and cooperatives offer much the same services as commercial banks. However, they will not have the breadth of choice or range of services. You may also find that they have shorter opening hours and fewer employees. 

However, these establishments do not use their profit for shareholder dividends. Instead, the money is relocated to the customers themselves. This means lower interest rates on loans, higher interest on savings, and reduced transaction fees. 

Services Offered

Retail banks will offer several services to customers. Depending on the size of the bank, these may have different terms and conditions that help fix one to your needs. 

Transaction Accounts

These are the standard accounts that allow people to make deposits and withdrawals when they see fit. It will often be the account people have wages deposited into. In the US and some other countries, they are often known as checking accounts. 

Savings Account

A savings account allows depositors to hold money for long periods and gain extra interest on it. They are less liquid than transaction accounts, often having stipulations for the withdrawal of funds. In compensation, interest rates will be better than the transaction account. 

Cards

Cards include credit and debit cards. A credit card allows a customer a small line of credit for free use. This often has a higher rate of interest than longer period loans. 

Debit cards work similarly. However, they do not offer credit.

When you use the card, money deducts from the funds in your transaction account almost immediately. Therefore you can never spend more than you have.

ATM cards would also come under this category. They allow people to take money from an ATM in a particular geographical location or district.

Loans

Banks make money from the interest charged on loans, and they are a vital part of their operation. You will find a vast range of loans available from a bank. They could be long-term home improvement loans or short-term personal loans.

Online Services

There are few banks these days without online services. This will let you do e-banking, checking your statements and making transactions online. This frees up labour at the bank itself and gives you 24-hour access to services. 

Functions of a Retail Bank

Retail banks do not just serve consumers. They are part of the larger economy and provide an essential role within it. All banks are overseen by the central bank of the country they are situated in and must abide by the fiscal policy.

For example, they can control the supply of money in the economy. By adjusting the interest rates and adjusting requirements for credit, they can decide how much money is available. 

They can also stimulate the economy by lowering the costs of borrowing. When the economy needs help, they lower interest rates to increase consumer spending. In times of prosperity, this can rise, resulting in more profit.

Learn More About Retail Banking

When choosing retail banking, make sure you shop around. Different banks will have a range of services, some of which may be better for your needs. Get recommendations online or ask friends, family, and colleagues who they use. 

If you need assistance making the right financial decisions, then CFI.co should be your first stop. From savings to shares, we are the online resource for everything you need to know about the world economy.

Click here to see all our articles on retail banking. 

The Benefits of Private Banking

Private banking is an exclusive service offered to people with a high net worth. The best private bank will give you a dedicated relationship manager and, in some cases, uses a team approach to give you expert advice on a variety of financial subjects.

Clients get access to a range of financial services, which may include financial planning advice, exclusive credit cards, portfolio management, investment strategies, retirement planning, and hedge fund investing among others.

While often used interchangeably, the terms private banking and wealth management don’t refer to the same thing. Wealth management is a broad category that deals with optimizing a client’s portfolio. Personal banking offers personalized care and management of finances for the extremely wealthy.

Do You Qualify for Private Banking?

Being the realm of the rich, private banking is not available to everyone who has a savings or checking account. The specific eligibility requirements vary from bank to bank, but the service is reserved for high-net-worth individuals. Some banks are happy with clients who have six figures in investable assets while others demand eight-figures.

Investable assets are any assets that are liquid or easily liquidated. They may include the money in checking and savings accounts, bonds, retirement accounts, money market accounts, trusts, and stocks. Understandably, many banking institutions don’t make their standards known.

It is possible to qualify for private banking even if you don’t meet the minimum requirements. A good example of an exception to the rules is the children of wealthy individuals. Banking institutions are always looking to the future, specifically wealth transfers. They want to make sure that funds stay with them even after the wealth changes hands.

Young professionals who, based on their education and career path, appear to be on the track to meeting minimum requirements may receive an exception. Commonly referred to as the emerging affluent, they can prove valuable clients for the private bank and wealth management firms in the future.

Should You Become a Private Banking Client?

The concierge nature of private banking is one of the factors that makes it such an attractive product. However, that’s not all it has to offer. Private bankers offer a one-stop-shop for all of your banking needs. That said, here are some of the benefits you can expect with private banking.

1. Dedicated Representative

The main perk of private banking is that you are assigned a dedicated representative, or a team of people, whose job is t understand your circumstances and cater to your financial needs. The representative makes it easier to initiate wire transfers, deposit checks, and more.

You will never have to worry about waiting on hold to talk to the next available representative. Because your dedicated manager has intimate knowledge about your financial situation, you won’t have to repeat your preferences every time you need something at the bank.

2. High Investment Returns

Banking institutions allocate the best-performing staff to the private banking division to manage the finances of high-net-worth individuals. The result is higher investment returns for the clients.

The average rate of returns from private banking investments is 7% to 13%. Sometimes that rate goes as high as 30%. The extensive resources offered by private banking allow clients access to investment vehicles like high-performance hedge funds. You also get expert advice on investment options with high rates of returns.

3. Access to a Network of Specialists

Your dedicated manager has got you covered and will connect you to the right specialists. They will connect you to the best tax attorney, estate advisor, investment analyst, or any other specialist you need. The ability to have your private banker set up meetings with these specialists can be a time-saving perk for you.

For many private banks and wealth management firms, having a comprehensive and multi-disciplinary team of professionals with expertise in different financial areas is the key to business success. It allows them to provide the best wealth advisory services, which is key when dealing with high-net-worth clients.

4. Perks and Discounts

Every private bank offers some perks for their clients as a reward for the large volume of business they bring. Services like estate management, tax preparation, wealth management & investment advice, and corporate checking will be offered at a discount.

The foreign exchange rates are attractive for clients involved in the export and import business. Those involved in real estate will benefit from fast-tracked transaction processing through lead advisors. You will get access to lines of credit at lower interest rates than regular clients.

If opening a savings account, the bank may give you a higher annual percentage yield. From time to time, private banks host exclusive events so that they can interact with their high-net-worth clients. And even with the ongoing pandemic, there are still virtual opportunities like virtual wine tasting to connect.

5. One-Stop-Shop

In addition to discounted products, private banking clients get everything consolidated under one roof. You get enhanced services from a dedicated manager, who acts as the liaison with different departments within the bank. This ensures that you only get the best without having to knock on every door.

6. Privacy

Customer dealings and transactions offered to high-net-worth individuals such as private banking are anonymous. You will have access to proprietary products, and the dealings will be confidential to prevent competitors from selling similar products to the same people.

A culture of privacy is important to the wealthy as publicizing personal information could compromise their business interests. It helps protect them in case of lawsuits involving their investments. For most, keeping personal information private provides a sense of security.

7. Business Benefits

If you are a business owner, a relationship with a private bank can help your business grow faster. You can open your business and personal account with the same private bank, and enjoy lending opportunities and other benefits.

Moving funds from one account to the other will be hassle-free. Not to mention, you get to enjoy promos and discounts offered to regular clients.

Enjoy the Best of Private Banking

If you’re searching online for “private banks near me”, the guide above will help you choose the best private bank for you. Private banking makes it easy for high-net-worth individuals to manage their financial affairs in one place. It’s something to consider if you have over $500,000 investable assets and need the convenience of a bank concierge.

Contact us today!

Matchmaking Private Finance and Green Infrastructure

  • The contrast between the scarcity of investments in infrastructure and the excess of savings invested in liquid and low-return assets in the global economy must be dealt with.
  • Greening infrastructure in emerging and developing economies would benefit from being able to attract greenbacks into the business.
  • Development of pipelines of projects with homogeneous regulations and standards, as well as with minimum mismatch between risks and comfort of private investors to manage them will be needed.

First appeared at Policy Center for the New South (July 7, 2021)

The world faces a huge shortfall of infrastructure investment relative to its needs. With a few exceptions, such as China, this shortfall is greatest in emerging and developing countries.

The G20 Infrastructure Investors Dialogue estimated the volume of global infrastructure investment needed by 2040 to be $81 trillion, $53 trillion of which will be needed in non-advanced countries. The Dialogue projected a gap—in other words, a shortfall in relation to the investment needs foreseen today—of around $15 trillion globally, of which $10 trillion is in emerging economies (Figure 1, left panel). The World Bank has estimated that, for emerging and developing economies to reach the Millennium Development Goals set for 2030, their infrastructure investment would have to correspond to 4.5% of their annual GDPs (Figure 1, right panel).

Infrastructure Gaps

In addition to the need for infrastructure investment, there is a need for that investment to be ‘greened’ as rapidly and extensively as possible, in order to minimize the negative impact in terms of increased global warming. For example, the energy sector must be decarbonized by expanding the use of renewable sources instead of coal. Increases in use efficiency, and the elimination of subsidies for the use of fossil fuels, would be part of this strategy.

Transport is now responsible for 25% of the world’s greenhouse-gas emissions. This must be reduced by shifting transportation to low-carbon options, in addition to investments in energy-efficient equipment, and supporting the transition to electric vehicles and fleets.

A major part of the ‘greening’ will be in cities: improved water supply and sanitation services, changes in energy supply, waste recycling, and greater energy efficiency through better building standards and/or renovation of existing buildings. This transition, as for manufacturing and agricultural activities, will require investment in infrastructure.

A major obstacle holding back such investment is the lack of fiscal space, which is constraining public spending. This problem has been made worse by the fiscal packages adopted because of the pandemic. While the largest advanced economies can afford to increase their public debt, with a low risk they will face deteriorating financing conditions, this does not apply to most emerging economies, let alone low-income countries grappling with unsustainable debt trajectories (Figure 2).

Higher global debt across the world

Consequently, measures need to be taken to expand the options for private financing of infrastructure projects. Indeed, according to data from the Institute of International Finance, over the past 15 years, institutional investors with long time profiles in their assets, such as pension funds, have been gradually increasing their allocations to infrastructure investments and alternatives to fixed income instruments, equity, and other traditional instruments.

Stable and long-term returns from infrastructure projects dovetail well with the long-term commitments of those financial institutions, particularly in the context of declining long-term real interest rates on public and private bonds, as seen in recent decades in advanced countries. Surveys carried out by Preqin show fund managers already pointing to the decarbonization of energy as a factor in attracting private investment to infrastructure.

The biggest challenge is to build bridges between, on the one hand, infrastructure investment needs in non-advanced countries and, on the other, private sources of finance abundant in dollars and other convertible currencies with few opportunities to obtain returns compatible with their requirements on their liability side.

Building such bridges requires the completion of two tasks. First, the development of properly structured projects, with risks and returns in line with the preferences of the different types of financial intermediation, would help close the private financing gap in infrastructure.

Investors have different mandates and skills regarding the management of risks associated with types of projects, and phases of project investment cycles. They demand coverage of risks whose exposure is not adequate or permitted by regulation. The absence of complementary instruments or investors is one of the most frequently identified causes of failure in the financial completion of projects. Figure 3 provides a snapshot of the diversity of instruments and vehicles through which private finance can participate in infrastructure projects.

Taxonomy of instruments and vehicles for inrastructure financing

The constrained fiscal space in emerging and developing countries can be used to mainly cover such risks and enable the building up of investment, rather than replacing private investment: crowding-in private finance rather than crowding it out. National and multilateral development banks could prioritize this instead of financing total investments.

Identifying attractive investment opportunities for different types of investors and combining these perspectives more systematically around specific projects or asset pools is a promising way to fill the infrastructure financing gap. The planning and integrated issuance—with different time profiles—of fixed-income securities, bank loans, credit insurance, and others, for the different phases from project preparation to operation, make that combination possible.

The second task to boost private infrastructure investment in emerging and developing economies is the reduction of legal, regulatory, and political risks. Transparency and harmonization of rules and standards can increase the scale of comparable projects and make it possible to build project portfolios. Non-banking financial institutions often highlight the absence of large enough project portfolios as a disincentive deterring the setting up of business lines focused on the area. This is a particular weakness in the case of smaller countries.

The contrast between the scarcity of investments in infrastructure—particularly in non-advanced economies—and the excess of savings invested in liquid and low-yield assets in the global economy deserves to be confronted. Greening infrastructure in non-advanced economies would benefit from being able to attract greenbacks into the business.

Watch Bridging Private Finance and Green Infrastructure

Otaviano Canuto, based in Washington, D.C, is a senior fellow at the Policy Center for the New South, a nonresident senior fellow at Brookings Institution, a professorial lecturer of international affairs at the Elliott School of International Affairs – George Washington University, and principal at Center for Macroeconomics and Development. He is a former vice-president and a former executive director at the World Bank, a former executive director at the International Monetary Fund and a former vice-president at the Inter-American Development Bank. He is also a former deputy minister for international affairs at Brazil’s Ministry of Finance and a former professor of economics at University of São Paulo and University of Campinas, Brazil.