5 Key Differences: Commercial Bank vs. Investment Bank

Are you looking into what type of bank will be perfect for you? Deciding between a commercial bank vs. investment bank can be a complicated question. 

Luckily, we’re here to help. Keep reading, and we will discuss the five key differences between commercial banks and investment banks. 

1) Services

First, its important to consider the services the two provide. They offer different things. 

If you’re looking to underwrite new debt and equity securities, selling securities, pilot mergers and acquisitions, reorganizations, and or broker trades, then an investment bank is for you

On the other hand, if you’re in the market for individual loans, small business loans, checking and savings accounts, and or certificates of deposit, then you’re looking for a commercial bank. Most people are probably most familiar with commercial banking for their checking and savings accounts. 

Have you figured out precisely what services you are looking for? Large scale or small scale? 

Great, now that we’ve got that covered, let’s look at what kind of expenses and fees we are looking at. 

2) Expenses and Fees

While the dollar amount isn’t a distinguishing factor, it does show some differences. The fees are how the banks make their income. 

Investment banks typically deal with more significant dollar amounts due to having bigger corporations as clientele and higher monetary amounts in investments. Commercial banks handle basic financial transactions, which can get higher in monetary amounts, but usually equally a lesser amount of money. 

Investment banking comes with a set of fees due to the level of risk involved. The fees differ from firm to firm, but some of the potential fees could include:

  • Retainer fees
  • Upfront fees
  • Expense reimbursement
  • Success fees 
  • Minimum fees
  • Engagement fees

So what does this all cost? A monthly retainer typically doesn’t go lower than $5,000 a month. The retainer is what secures the investment bank and covers their cost as well as the risk they are taking on. 

Commercial banks also have their own sets of fees. They typically range much lower than that, though. 

Commercial bank fees vary based on account fees, safe-deposit box fees, and late fees. Some examples of potential account fees could be:

  • Monthly maintenance charges
  • Minimum balance fees
  • Overdraft fees
  • Non-sufficient funds charges

You’ll also run into more fees when it comes to loans, but it depends on the different kinds you’re considering. 

Now that we’ve got that covered, who exactly uses which type of bank?

3) Types of Clientele

Are you looking at banking options for an institution or for yourself? 

Well, big investment banking clientele can vary depending on the scope of need or based on the client. Some examples of big investment banking clientele are:

  • Corporations
  • Pension funds
  • Other financial institutions
  • Governments
  • Hedge funds

Large investment banks can also serve as financial advisors or brokers for institutions or companies. 

An investment bank could also offer retail operations for smaller individual clients.

If you’re reading that and saying, “Nope, not me!” Then you could line up with the commercial bank clientele more so than the investment bank.

The clientele of commercial banks primarily comes from individuals using personal checking and savings accounts, or through personal loans. Basically, ordinary people who are looking for standard bank needs. 

Through loans and earning interest income from investments, commercial banks make their money to provide new business loans. 

You now know what services are offered, how much it could cost, and if you fit their clientele. Did you consider the regulations that come with commercial banking and investment banking?

Don’t worry. We’re covering that next. 

4) Regulations 

All banks have some set of regulations to follow

Government authorities like the Federal Reserve and the Federal Deposit Insurance Corporation regulate commercial banks.

Commercial banks are insured so they can maintain customer account protection. For example, some can cover up to $250,000 deposits. 

Investment banks aren’t regulated nearly as much as commercial banks. The Securities and Exchange Commission governs them. This means their clients have less protection, but and gives the bank more operational independence. 

Because of the regulation difference, investment banks have higher risks associated with them. When you use an investment bank, you assume the risk, whereas commercial banks work in the interest of their clients. 

5) Banking Examples

You may be thinking great, now I know some difference, but can you help me out with some examples?

You got it! 

Have you heard of JPMorgan Chase, Goldman Sachs, Morgan Stanley, Credit Suisse, or Deutsche Bank? These are examples of large investment banks. 

Commercial banks in the United Kingdom could include HSBC, Royal Bank of Scotland, Lloyds TSB, Barclays, and Santander. 

Some banks could combine the functions of a commercial or investment bank. This could aid in the sales of an IPO or increased trading. 

This isn’t crucial to dive into, but worth noting. 

Some of the employees you can expect to run into in a commercial bank include tellers, sales associates, trust officers, loan officers, branch managers, and technical programmers. Whereas in investment banking, you’ll probably deal with an investment banker directly. 

So, Where Do You Go From Here?

Now when you ask the question commercial bank vs. investment bank, you have the ability to make an educated decision.  

From offering different services to helping different types of clientele, the kind of bank you choose will be a choice you make based on your unique set of needs at the time. Luckily, you have plenty of resources to turn to. 

If you’re interested in learning more about the finance and banking world head to CFI.co.

UnionBank, Lazada and Mastercard launch the Philippines’ first e-commerce credit card

Add to card everything you love with exclusive online shopping rewards

Manila, Philippines, August 8 – Union Bank of the Philippines (UnionBank) and Lazada Philippines, together with Mastercard, have launched the all new UnionBank Lazada Credit Card, the country’s first e-commerce credit card that makes online shopping even more rewarding.

UnionBank, Lazada and Mastercard launch the Philippines’ first e-commerce credit card

The new UnionBank Lazada Credit Card is the only credit card that allows cardholders to directly earn up to 6x Lazada wallet credits from their online spend at Lazada – the highest earning rate among other credit cards in the market.

Every P200.00 spend at Lazada purchases earns cardholder with P6.00 Lazada credits. Meanwhile, cardholder earns P1.00 for every P200.00 on all other purchases outside Lazada.

“As the country’s leading digital bank, we’re truly excited about this new partnership because we believe the new UnionBank Lazada Credit Card will enable us to serve the growing needs of Filipino shoppers in this rapidly changing digital economy,” said UnionBank president and CEO Edwin Bautista.

During these uncertain times, UnionBank Lazada Credit Card gives customers a new safe and secure payment option for their online transactions. As another testament to UnionBank’s digital banking technology, the UnionBank Lazada credit card also introduces a new virtual credit card – which cardholders can use for online transactions without waiting for the physical card to be issued.

The cardholder will receive the virtual card, activate and use it to make online purchases immediately once application is approved. The virtual card can be viewed safely through the UnionBank Online app, with security controls including biometrics and one-time-password (OTP).

A physical card will also be delivered to cardholders for their face-to-face, point-of-sale transactions.

It is a privilege to collaborate with UnionBank as we work towards creating a secure and inclusive digital economy in the Philippines. With more people turning to the Lazada platform to meet their needs, the new UnionBank Lazada Credit Card will empower Filipino customers to get more value from their purchases as they embrace a cashless digital lifestyle,” said Ray Alimurung, Lazada Philippines’ Chief Executive Officer. 

“We’re excited to partner with Lazada Philippines and launch this newest co-brand credit card with the highest earn rate of up to 6X rewards at Lazada. Especially in this digital age and in the backdrop of limited mobility due to the global pandemic, more and more shopping is done online, and this card is the perfect product to use at Lazada. The more you shop at Lazada, the more you earn credits,” added Ana Delgado, UnionBank Consumer Finance Center head.  “I invite everyone to experience how UnionBank Lazada Credit Mastercard makes adding to cart and checking out a rewarding experience. So add to card now!”

“Mastercard is pleased to partner with the country’s multi-awarded digital bank and the top e-commerce platform in Southeast Asia to deliver more value to Filipino e-customers. The UnionBank-Lazada Credit Card is a demonstration of Mastercard’s global expertise in co-brands and its continuing commitment to bringing digital solutions that enable a seamless and secure shopping experience online,” said Rowell del Fierro, country manager in the Philippines for Mastercard.

On top of that, cardholders need not compute for any point conversion. Earned rewards are in the form of peso value credits, plus earned credits can be conveniently transferred to the cardholder’s Lazada Wallet using their UnionBank Online app with just a few clicks, anytime, anywhere.

Enjoy exclusive shopping benefits at Lazada with the new UnionBank Lazada Credit Card! Get P5,000 Lazada Wallet credits as a welcome gift when application is approved for a UnionBank Lazada Credit Mastercard (Terms & Conditions apply).  Enjoy free monthly shipping of up to P50.00 and free discount vouchers of up to P250.00 during their Mega Sales (birthday sale, mid-year sale, 9.9, 11.11. 12.12). Special discounts and exclusive sales also await cardholders from Lazada.

Apply now and start a new digital shopping experience at Lazada with the new UnionBank Lazada Credit Card at www.unionbankph.com or www.lazada.com.ph. Get ready to #AddToCard everything you love at Lazada’s 8.8 Shop Local Bounce Back Sale on August 6-8 and show your support to homegrown brands!

Follow the Money: What Do Investment Banks Do?

There are several different types of banks and institutions out there. By knowing what these banks do and how they differ, you’ll be able to improve your financial literacy and make better investing decisions. 

So, what’s an investment bank? And what do investment banks do?

An investment bank essentially acts as an intermediary institution that performs a variety of services. The majority of investment banks specialize in complex and big financial transactions. These kinds of banks help businesses make financial decisions and raise the capital they need. 

But there’s a lot more to it than just that. Are you interested in learning more? If so, then continue reading and we’ll walk you through everything you need to know!

How Do Investment Bank Works?

There are two main divisions of investment banks worth knowing about. The first is the advisory division, which is paid a fee for their work. There is also the trading division, which realizes losses or profits based on their performance in the market.

A person who works in an investment bank might have a career as a salesperson, trader, or financial advisor. While a career at an investment bank could be lucrative, it typically also involves a lot of stress and long working hours. 

Investment banks are best known for their financial intermediary roles. This means that they help businesses issue new shares of stock in an initial public offering (IPO). They also assist businesses to obtain debt financing by attracting investors for corporate bonds. 

The role of the investment bank starts with counseling before the underwriting process even starts. It then continues after the securities are distributed as they continue to offer advice. 

Investment banks also look at the accuracy of the corporation’s financial statements and they write papers that explain the offering to investors. The clientele of investment banks tends to consist of:

  • hedge funds
  • governments
  • corporations
  • other banks
  • pension funds

Many investment banks tend to use their size to their advantage. The more well-connected an investment bank is, the more likely it’s going to profit. It does this because it’s better able to match sellers and buyers. 

Many large investment banks have customers all over the world. 

What Do Investment Banks Do?

Investment banks perform a variety of functions. Often, they will act as the financial advisor to powerful institutional investors. An investment bank is supposed to be a trusted partner that provides strategic and useful advice on all kinds of financial matters. 

They’re able to do this by combining their ability to evaluate and spot investment challenges and opportunities along with understanding the desires of their customers.  

Investment banks also deal with mergers and acquisitions. During this process, the job of the investment bank is to determine the value of a possible acquisition and to help the parties come to a fair price. The bank will also help with executing and structuring the acquisition so that they can ensure that the deal goes as well as possible. 

Research is another important service that investment banks deal in. The research divisions of these institutions review companies and then write documents about their prospects. They will usually include “buy,” “sell,” and “hold” ratings. 

Although the research won’t bring in revenue on its own, the information that they come up with is used to help traders and sales. Investment bankers also get publicity for their partners and clients.

The research is also going to act as investment guidance to outside customers. This will hopefully get the clients to take the advice and execute a trade via the trading desk of a bank, which will then lead to increased revenue for the bank.

The research division is what powers an investment bank’s ability to conduct quantitative analysis, credit research, macroeconomic research, and fixed income research. All of this will then be used both externally and internally at the bank.  

Underwriting Deals

Investment banks will usually underwrite deals while they’re also arranging capital markets financing for their customers. This means that they manage the risk that comes with the process of purchasing the shares of stock from the issuers and selling them to institutional buyers or the public. 

Investment banks purchase shares at one price and then add a markup to the sale price. This brings them a profit that makes up for the risk that they’re taking on. This is also known as the underwriting spread

There will usually be a head investment banker who works with a group of investment bankers. This group is referred to as a syndicate and they all work together to underwrite an issue. This helps to spread the risk out among everyone. 

An underwriter will sometimes just play the part of a go-between for marketing deals. They help to market the stock but don’t take on the risk that comes with underwriting. When this happens, the investment bankers will be able to sell shares and get paid on the basis of commission. 

The Importance of Knowing About Investment Banks

Hopefully, after reading the above article, you now have an answer to the question, “what do investment banks do?” As we can see, investment banks tend to work with large institutions and perform complex deals that can involve enormous amounts of money.

And even though many people might not directly interact with an investment bank, the actions that these banks take can affect a variety of people, especially those who invest. And by knowing how these banks operate, you’ll be better to make more informed and confident financial and investing decisions.

Are you wondering if now’s a good time to invest? If so, then make sure to check out our other articles for more!

UBX appoints new Chief Investment Officer

In line with its strategy to explore and invest in companies and platforms of the future, UBX—the Fintech and Corporate Venture Capital arm of Union Bank of the Philippines (UnionBank) — is announcing the appointment of Matthew Kolling as the company’s Chief Investment Officer (CIO).

UBX CIO Matthew Kolling
UBX CIO Matthew Kolling

As CIO, Kolling will be managing UBX’s Corporate Venture Capital (CVC) fund. He will also play a key role in raising capital for UBX while assisting the company in key corporate transactions, including the structuring of joint ventures and acquisitions.

Prior to his appointment at UBX, Kolling has been Head of Venture Investments at Aboitiz & Company since 2019, wherein he had been working with UBX on investment portfolio decisions. Before that, he held senior positions in Private Equity, Venture Capital, and Investment Banking at firms such as Providence Equity Partners and Morgan Stanley in New York.

Kolling has more than 20 years of experience in managing investments and deals in the Technology and Telecommunications industries and is active in Venture Capital and startup communities in the Philippines and the Southeast Asian region. He currently chairs the Manila Angel Investors Network, among others.

“We at UBX are excited to welcome Matt as our new CIO. We firmly believe that Matt will be instrumental in driving value creation opportunities, both within the CVC fund and our corporate ventures. We look forward to working with him as we fulfill UBX’s vision of a future where banking services are embedded into everyday experiences that matter,” said UBX president and CEO John Januszczak.

Meanwhile, UnionBank president and CEO Edwin Bautista said, “The addition of world-class talents in our pool reinforces our strategy to future-proof the organization and our business as we prepare for many new opportunities that come with the changing times.”

7 Factors to Consider Before Choosing an Investment Banker

The total revenue for 12 of the largest investment banks was $147.5 billion in 2019. While the revenue was a 4% decrease from the previous years, investment banking remains a crucial aspect of the economy. Consequently, there has been a surge in the number of investment bankers.

Selecting an experienced and qualified investment banker can be daunting. You need to be critical in your vetting as the choice of investment banker will impact your transaction experience. A professional investment banker will give you the best advice, negotiate with the utmost prowess, and ensure that you get the best deal.  

Are you looking for assistance in managing your investments? Here are factors you might want to consider when choosing an investment banker.

1. Reputation 

The reputation of a bank is an essential consideration. However, the character of the people transacting on behalf of the bank is more crucial. It would be best if you vetted an investment banker as an individual.

Check their past deals. Do they have a track record of success? The main areas to consider are the banker’s industry, the size of the deals closed, and the transactions involved.

Your chosen investment banker should be someone whose reputation is commendable. You can research and vet more to know the type of person who will be handling your investments. 

2. Chemistry and Trust 

You don’t want to take chances collaborating with an investment banker you can’t trust. You will be entrusting all your financial transactions based on advice from this specific investment banker in the long-term. The process will undoubtedly be time consuming and intimate.

As such, ensuring that you develop synergies with the investment banker is necessary. Chemistry refers to the inherent feeling of being comfortable listening to your banker’s advice. You’ll also need to ask relevant and somewhat delicate financial questions over time. 

It would help to focus on the chemistry when shopping around for an investment banker. If the chemistry isn’t there, you might end up dealing with a more stressful situation. Trust, on the other hand, is non- negotiable. 

You can’t afford to deal with someone you can’t trust. Trust must be at the centre of any relationship with an investment banker before committing to a long term engagement. This is especially crucial considering the value of your investment. 

3. Get a Relational Investment Banker 

In investment banking, creating rapport with clients is essential. You need to prioritize a banker with essential relationship skills. While the skill is intangible, it’s one of the most critical for investment bankers.  

The stakes in investment banking are quite high. An investment banker with the right social skills and attitude will address extreme conditions and individuals. Nothing is more fulfilling than having an investment manager who understands you!

You’ll be communicating with bankers often when running a transaction. It would help to identify bankers with the right communication skills. Within the first encounter, you can gather clues that will determine whether the banker has the right set of communication and relational skills.

4. Valuation and Fees

Cost is always a factor when choosing a reliable investment banker. You want to understand the cost implications before committing fully to such services. The banker should be able to present an accurate cost of services.

While you might be keen to attract someone who charges the lowest fee, it would help focus on the ROI. Your goal should be to work with someone who has the highest qualifications.  It would help balance the need for a pocket-friendly deal with a highly reliable banker to ensure value.  

It would also be essential to ensure that you understand all the hidden fees and any other charges before hiring an investment banker.

 When it comes to valuation, a good banker should keep up with the trends in your specific industry. This helps in interpreting the market activities and their impact on the value of your valuation. Ensure that you understand the range of valuation before committing to hiring.  

5. Availability of Resources 

A reliable bank should have adequate resources for your deal. If a firm has large teams, they are unlimited on the financial transactions it can handle. While this might be a positive aspect of the bank’s view, it might not favour you.

It is best to work with an investment manager who will guarantee you a personal experience. Confirm if they have the right resources. You can check out the different types of investment banking services and the available resources to know if they resonate with your business needs.

6. Transaction Experience

One of the essential factors you might need to consider when selecting an investment banker relates to experience. Can they get the deal done? You don’t want to deal with a novice who might take longer to deliver. 

You also want to rest easy, knowing that your investment banker has the experience necessary to deliver. A banker who has been in the industry long enough understands the dynamics in the sector. The easiest way to validate an their experience is to consider the number of past transactions.

The more the number of transactions the banker has, the more the experience they bring on the table. It would help to consider the level of experience the they have before proceeding to commit. 

7. References and Reviews 

Every investment banker worth their salt has a battalion of loyal clients. Reviews play an important role in determining any business’s repute. Before you decide to hire an M&A specialist, consider the testimonials that back up their exceptional services.

Most past customers provide honest feedback on their engagement with respective investment bankers. You can utilize such information to determine the most suitable banker to handle your case. It would also help consider negative reviews as a red flag when dealing with investment banking service providers for the first time.   

The Right Investment Banker Has a Significant Impact on Your Wealth  

Transactions are often laden with challenges. You’ll meet buyers who are more familiar with the market than you, leading to disagreements. With an experienced investment banker, you can rest easy knowing that the process will be seamless. 

You need to familiarize yourself with the banker’s skills and experience. Thorough vetting will enable you to settle for the best talent around. 

Contact us today for compelling articles on financing.

7 Benefits of Using Private Banks for Small Businesses

When considering your options about your finances and your new business, the tendency is to only consider high street banks.

This might not always be the best option for you and your business. It is essential to consult all the types of banks that are available and how they can facilitate your requirements and needs.

Private banks might just be the way forward when looking at a bank to store and manage your company’s finances and outgoings.

In this article, we will go through and explain 7 benefits of how using a private bank can help small businesses and why you should choose one.

Read on to find out more about private banks and why they could be the solution for your business.

1. Private Banks Offer Additional Support to Their Clients 

Private banks are run in a different way than average high street banks. They actively work with their clients and can offer tailored advice on not just various financial aspects of their business, but their personal finances as well.  

Private banks are able to go above and beyond for their clients in terms of managing their assets, wealth, and finances and give an in-depth analysis of what a client should be doing with their projections and future investments.

2. Private Banks are Highly Personalised For Their Clients

A real benefit of choosing a private bank over a regular one, is you are often assigned a private banker who manages your account. This means that a singular person is in charge of your finances, and has a much greater understanding of your goals and has a keen knowledge of your business. 

They are able to actively recommend and advise on your finances whilst developing a relationship with you.

You are able to have confidence in your own personal banker who will be proactively searching for the best investment options and course of action for your business. 

3. You Have a Direct Line to the Bank

Often one of the most frustrating things with traditional banks, is that if you need an issue resolved or have a question that needs to be answered, you might have to ring and wait for hours on hold to speak to someone. 

The person you eventually get through to has no knowledge of your business, and you will probably need to repeat yourself a few times whilst you are transferred to different departments.

This whole process can be incredibly time-consuming and frustrating, and you might not even get the resolution or information you need.

With private banks, this is never an issue. You often will have a direct line to your own personal banker, who is completely in tune with your finances and is able to facilitate your requests much quicker than a regular bank.

4. Private Banks and Bankers Fit into Your Financial Support Network 

If you have other elements to your financial support network such as an accountant or lawyer, the private bank or banker will be able to take an active role in this infrastructure and speak to them regarding any issues or financial information.

This connection between the various aspects of your financial support system can be integral to how your business can develop and grow. This is not something that can be achieved or managed using a regular bank.

5. The Relationship is Tailored and Flexible 

When beginning an account with a private bank, you will have a meeting to discuss everyone’s expectations and what you are wanting out of the relationship between your business and their bank.

You are able to tailor a schedule of how often you should meet and what needs to be discussed at these meetings. And if they need to be done in person, or whether a phone or video call will be adequate.

The benefit of a private bank is that the contact and schedule of the client and bank relationship is personalized to the client’s requirements.

6. The Bank Will Assign You a Banker Best Suited to Your Account 

This is dependant on the bank you decide on, but private banks will take a look at your application and make informed choices based on who at their company will be the best fit for you.

Bankers will have specific knowledge and expertise in certain industries and sectors, the bank will always try and match a client with an employee who is most qualified to handle your finances. 

7. Private Banks Offer Additional Perks

If you qualify for certain VIP services then you might have access to some great perks or discounts.

Some banks offer premium travel services or favorable mortgage financing and options with discounts on fees and reduced interest rates.

There are some that offer free worldwide travel insurance, discounts on hotels and give you a certain number of points every year to redeem on holidays and breaks away. 

It is worth enquiring with a private bank to see what type of perks and discounts they can offer you if you become a client. These options could help you save or redeem hundreds of pounds in your private finances. 

Private Banks: Where Can I Find Out More?

We hope you have enjoyed this article explaining the benefits of choosing a private bank for a small business. 

The focus is always going to be on personalization and quality service with private banks. You do not have access to that level of care and proactiveness with a regular bank.

If you want a bank that will act as a consultant, who will be supporting you at every stage of your financial cycle, then a private bank might be the option for you and your business.

If you have any further questions about the benefits of private banking, why not check out our previous blogposts? Or contact us directly?

7 Mistakes to Avoid When Opening a Business Bank Account

When you’ve just begun a new business venture, one of the first things that you’re advised to do is open up a business account for the company. But, when you’re opening a business bank account, there are somethings that you’re going to want to avoid at all costs.

What should be avoided? We’re glad you asked because in this article we’re going to give you a list of things that you should try to avoid doing at all costs.

1. Incomplete Account Information

When you attend your account opening appointment, ensure that you’ve got all the documentation you need. And if you’re not sure if the document is required it’s best to bring it along just in case.

Before attending your meeting when setting up the appointment check with the bank about what documentation is required. This will reduce the likelihood that you don’t have all the information needed to begin setting up your account.

Having missing information could mean having to reschedule your appointment altogether.

2. Using Your SSN Instead of FEIN

If you’re not aware of what these initials stand for the first is your social security number and the next one is your federal employer identification number. When you arrive for your meeting ensure that the number you place on your account is your FEIN and not your SSN.

Many business owners that are just starting out make the mistake of placing their SSN on the account, which can prove problematic in the future especially when it’s time to fill out tax documents for your business taxes.

Anything that requires a number for your business should almost always feature the FEIN that was assigned to you when you filled out the paperwork to register your company as an LLC.

3. Having One Account

Some people may think that there’s no way they’re going to mix up the money that’s deposited into their account if they keep one account for personal and business needs. But, the reason that it’s recommended you have separate accounts is so that you don’t experience issues when it comes to doing your taxes, accounting needs, etcetera.

Another reason that you want to keep your accounts separate is that you’ll want to refrain from being tempted to reach into the money that is designated to the company. And if you’ve only got one account, it can be challenging to differentiate between your personal funds and the business funds.

4. Check-Signing Access

If you’ve got a business partner or plan to take on one in the future, you need to ensure that you provide them with access to sign checks. If you don’t provide your partner with check-signing access you’ll be the only one able to deposit checks or a check may be flagged if your partner attempts to sign it.

To avoid wasting time and becoming frustrated, ensure that you’ve taken care of this minor detail beforehand. You never know when you’ll need that check deposited, or you may be out of time and not able to do it yourself.

5. Picking the Wrong Bank

Not all banks are created equal, nor do they all offer the features that you would be looking for when it comes to opening your business account with them. The bank you choose may have strict limitations on what they will allow a new business owner to take out when it comes to business credit.

Another thing you’ll want to watch out for are banks that are new and not as well known. The reason that you want to steer clear of these banks is for the protection of your company money.

When it comes to your business banking account, you want to make sure that you’re able to meet the requirements of the bank and protect your money at the same time.

6. Minimum Monthly Balance and Fees

Another common mistake made by small business owners is not taking note of the minimum monthly balance. This means that at the end of every month, your account must have a specific amount in it or you’ll face some kind of monetary penalty.

You’ll also want to ask about any monthly maintenance fees that will be deducted from the account. It’s also beneficial to ask if there’s anything that you can do on your side that will wave additional fees such as making a large transfer to your business savings account.

Speaking of your business savings account the typical bank will only allow you to make a specific number o withdrawals from this account every month. If you exceed the number of acceptable withdrawals, you may face a monetary fine.

7. Ordering the Wrong Checks

Ensure that when you’re ordering checks for your business, the correct name is printed on the checks. Some people make the mistake of using other names or their personal names on the check instead of putting the name of the business.

The reason that this is problematic is that when a processor of a payment goes to put a payment through to prevent fraud, they ensure that the name on the check is legit. If your name or another company name appears, then it could lead them to flag the payment as a fraudulent payment.

This would then leave you having to be on a lengthy phone call explaining the mistake and inevitably having to order all new checks. Avoid this from the beginning and ensure that the checks you’ve ordered for your business have the legal name of the business that appears on all your company paperwork.

Trust us, no one wants to deal with the headache of having to wait for checks to arrive in the mail.

Business Bank Account Mistakes Avoided

Now that you know all of the mistakes not to make when opening your business bank account, you can open your account. Avoiding the mistakes listed above will help you to save valuable time and frustrations correcting your mistakes.

If you’ve found this article useful, then you’re going to want to check out some of our other articles. Our site focuses on providing engaging and informative content about things like finance and business every day.

You won’t want to miss out on the advice offered on our site.

Philippine Bureau of the Treasury is among Asia’s pioneers in leveraging Distributed Ledger Technology (Blockchain) for bond distribution

The Philippine Bureau of the Treasury (BTr), together with Union Bank of the Philippines (UnionBank) and the Philippine Digital Asset Exchange (PDAX) – a Bangko Sentral ng Pilipinas (BSP) licensed entity, is the first in Asia to launch an app for the distribution of government bonds enabled by Distributed Ledger Technology (DLT).

Philippine Bureau of the Treasury is among Asia’s pioneers in leveraging Distributed Ledger Technology (Blockchain) for bond distribution

National Treasurer Rosalia V. De Leon said, “The launch of Bonds.PH paves the way for all Filipinos, particularly the unbanked, to easily and affordably invest in the BTr’s newest retail treasury bond, RTB-24. The mobile app presents a compelling opportunity for all to invest and help the Republic raise funds for economic recovery and COVID-19 response.”

Bonds.PH makes bond investing easy. It’s completely digital and available 24/7. Filipinos can invest in retail treasury bonds by downloading the app and pay, for as low as PHP 5,000.00, using InstaPay, GCash, Paymaya, and digital as well as over-the-counter at UnionBank.

Treasurer De Leon, Finance Secretary Carlos Dominguez III and UnionBank Vice Chair Justo Ortiz onsite, together with BSP Governor Benjamin Diokno and National Economic and Development Authority (NEDA) Secretary Karl Kendrick Chua virtually, did a demo of the Bonds.PH app at the official launch held yesterday.

“This is the first retail treasury bond issuance to leverage on blockchain technology – in Asia, and likely the world,” said Edwin R. Bautista, UnionBank President and CEO. “The Philippines is ready to lead the way into the future and tech up the nation with innovative, inclusive opportunities, powered by emerging technologies, for the benefit of all Filipinos.”

Bonds.PH is blockchain-enabled as transactions are recorded in a DLT-based registry in addition to the existing NROSS system. DLT enables immutable and tamper-proof record-keeping as it is recorded on the blockchain.

According to Nichel Gaba, Founder and CEO of PDAX – a fintech investment of UBX (a UnionBank subsidiary), “DLT or blockchain technology is governance by design with its cryptography and programmable smart contracts. This advantage allows the blockchain not only to preserve truth, but also to automate payments, enforce rules, and facilitate complex transactions via smart contracts at little to no cost.”

As such, DLT reduces manual verification and simplifies reconciliation bringing down processing time and costs. This is why the BTr sanctioned the pioneering effort so that through the pilot it can determine if leveraging DLT makes retail treasury bond distribution to the unbanked feasible and economically viable.

The Monetary Authority of Singapore (MAS) commended the groundbreaking endeavor.

“I want to congratulate the Philippine Bureau of the Treasury (BTr) for this important milestone,” said MAS Chief FinTech Officer Sopnendu Mohanty.

He added that, “2020 will be the year of commercialization of blockchain technology in the ASEAN region, and BTr’s efforts to build a DLT registry for bond issuance accelerates the success of the most exciting technology of our time. The blockchain community in Singapore will work together with the Philippines to share learnings, open-source resources and also facilitate connecting corresponding nodes to integrate market infrastructure for transparency and interoperability. The recently released Project Ubin Phase 5 findings by MAS will facilitate the creation of robust blockchain rails for future value creation.”

Chia Hock Lai, Co-Chairman of the Blockchain Association Singapore (BAS) and Chairman of the Singapore Fintech Association (SFA) said BAS and SFA are one with the MAS in fully supporting the Philippines and UnionBank in utilizing blockchain for financial inclusion.

The Philippine Securities and Exchange Commission (SEC) likewise offered its support.

“With our mandate to facilitate financial inclusion while maintaining investor protection, we support this initiative, which makes use of Distributed Ledger Technology,” said SEC Commissioner Ephyro Luis B. Amatong. “We look forward to the results from this initiative, which will contribute greatly to future DLT use cases for capital markets,” he added. The Philippine SEC is among the more progressive regulators in the world having released rules on crowdfunding, as well as draft rules on digital assets and digital exchanges.

Meanwhile, the BSP lauded the initiative for its impact on inclusive prosperity, “Given our advocacy to accelerate the digital delivery of financial services while deepening financial inclusion, we view Bonds.PH as a welcome addition to the expanding suite of available financial products serving wide market segments via innovative delivery channels and bridging the financially excluded,” said BSP Governor Benjamin Diokno.

“From the basic easing of the public’s access to transaction accounts to now this offering of retail treasury bonds to the masses in a simplified yet secure manner, shows the remarkable progress of our shared financial inclusion agenda. This surely marks the transition of blockchain technology from its buzzword status to a feasible, production grade solution capable of democratizing access to digital financial services,” said the Central Bank Chief.

“We look forward to the expansive adoption and success of this initiative and the public can always count on the BSP to remain supportive of responsible digital financial innovations,” he added.

UnionBank Vice Chair Ortiz, who also serves as Chairman of the Distributed Ledger Technology Association of the Philippines (DLTAP) and the Philippine Payments Management, Inc. (PPMI) added that, “Democratizing investment through digital channels and Distributed Ledger Technology allows all Filipinos to contribute to and accrue the benefits of nation building. Every Aling Belen and Mang Juan can save and invest. Download Bonds.PH now from the Apple App Store and Google Play Store and invest in our country!”

7 Questions to Ask Before Choosing Banking Services

The number of unbanked Britons currently stands at around 1.2 million. Banks in the United Kingdom play an essential role in bridging the individual and business-related financial needs. These financial institutions provide access to lending and borrowing facilities on top of offering safe volts for savers. 

As a client, choosing a bank that serves your needs is never easy. It would help if you considered a wide range of factors before settling for specific banking services. A reliable banking services provider should be able to guarantee you security, convenience, and cost-effectiveness. 

Are you in the process of selecting a banking services provider? Vetting such potential financial institutions is vital. These eight questions can help you probe such prospective banking service providers before entrusting them with your financial needs. 

1. How Much Are the Bank Charges?

Let’s face it; cost is the main deal-breaker when choosing a banking services provider. You might need a clear summary of the banking charges before selecting the right bank for you. Consider the summary of all the costs, terms, and conditions stipulated by the institutions before making a decision.

You might need to ask the potential service provider about any extra charges attached to their bank cards. This question will also help you figure out other management fees that apply. Some banks charge a fee for keeping your current and saving accounts.

It’s important to consider all these charges before making a decision. These standard banking fees should help you determine whether the potential banker is convenient for you. 

2. What Are the Digital Services Available?  

Every sector of the economy has since gone digital. The banking sector is not an exception.

 Most banking services providers now offer online services. However, there’re disparities on the different platforms and the range of services each bank offers. A reliable banking services provider should provide online services that help you save time and money. 

Online banking services should also be available at all times and on any device. Today, over 2.5 billion people globally have access to smartphone devices. As such, a suitable banking services provider should offer online banking services and mobile banking options.

Digital banking plays a vital role in bridging the gap among unbanked citizens. The Union Bank of the Philippines has been at the forefront in providing digital banking services to these unbanked populations. 

3. What Are Your Account Requirements?

Before you settle for a banking services provider, it would help to consider the dynamics related to account opening. You don’t want to end up selecting a specific bank only to learn about unfavourable account opening requirements later. 

What are your potential bank’s minimum requirements when opening an account? You might need to consider the minimum balance you need when opening an account. Further, it would help to consider the minimum balance that your account must have to remain active. 

Be sure that the underlying account requirements are stipulations you can easily manage. This will limit the risk of surprises in the future.  

4. Do You Allow for Overdraft?

Sometimes your account balance depletes below the withdrawable minimum. When this happens, most customers result in overdrafts. It’s important to understand beforehand if your bank allows overdraft transactions.

You would also want to be sure that the bank charges manageable charges when you overdraft. It would also help to gather information on whether your bank allows for overdraft protection. This is where you have the option of covering an overdraft with money from a different account. 

5. Do You Have a Branch Near Me?

Online or digital banking introduces remarkable ease and convenience when accessing financial services. Some particular needs or queries may require a physical meeting with a representative or the bank manager. It’s comforting to know that you have your money in a bank where you can walk in and out at your convenience.  

You might need to consider an institution that’s closer to your work or home. It’s safer to spend your time researching on banks that are closer to you on top of fitting your criteria. A bank that’s close enough makes the process of filing and receiving feedback on complaints easier.

6. What Other Services Do You Offer?

Not all banks are the same. Financial institutions offer different banking services that suit varying customer needs. Talking to bankers can help you unpick the unique services on offer. 

Apart from lending and borrowing, banks also offer a wide range of differentiated services. It would help to consider these unique services when considering a bank. For instance, banks that provide both regular banking and Islamic banking show a unique sense of inclusivity. 

It would be best if you also considered a bank with unique facilities such as investment and wealth management. Partnering with the Union Bank of Philippians ensures that you have access to private, wealth, and investment management.

7. Are There Withdrawal and Transfer Limits? 

You don’t want to end up working with a bank that limits you. Part of the need to have a convenient banking service is to expand your freedom when making transactions. It would be objectionable to rack up interest on your hard-earned money, yet have limits when it comes to withdrawal.

If you intend to save up considerable amounts of money in your account, this question is essential. Ultimately, how much you can withdraw should interest you. You don’t want to end up having to borrow money elsewhere while there’s money in your account due to limits. 

8. Do You Have Testimonials?    

There’s nothing more important than a reputation when dealing with a banking services provider. This is why references and reviews should be at the centre of this vetting process. Can your potential bank present a list of testimonials for exemplary services?  

Positive reviews play an essential role in determining a bank’s reputation. Consider testimonials as one of the determining factors when dealing with a banking services provider. 

Vetting Your Prospective Banking Services Provider Is Non-Negotiable  

Finding a secure and convenient way to bank your hard-earned money is vital. You don’t want to end up feeling frustrated when trying to access banking services. Convenience, affordability, and accessibility should be at the centre of your selection process.

Are you looking for a reliable banking services provider? These eight top questions can help you get a secure banking facility as soon as possible. At Union Bank of the Philippians, our impeccable services and products are the perfect answer to these questions.  

Have you been looking for a bank that encompasses convenience and safety under one roof? Visit our page for more resources.

Union Bank of the Philippines’ Private Banking bags 2 international awards for NextGen Academy

Union Bank of the Philippines (UnionBank)’s Private Banking recently won two international awards – the Best NextGen Offering from The Digital Banker’s Global Private Banking Innovation Awards 2020, and Best for Wealth Transfer/Succession Planning from Asiamoney Private Banking Awards 2020, for its pioneering program Next Generation (NextGen) Academy.

UnionBank Best Next-Gen Offering

The Digital Banker awards ceremony, meant to honor the world’s best-in-class private banks that demonstrate unrivalled drive and innovation to meet the sophisticated need of their high net worth clients – lauded the NextGen Academy that seeks to empower and set the entrepreneurial foundation for next-generation family business leaders.

Meanwhile, Asiamoney, in a statement, recognized UnionBank’s “digital-first approach” that is “already likely to appeal to younger clients, who demand instant access to their banking services through mobile apps rather than visits to branches.”

Succession Planning

Asiamoney commended the NextGen Academy for being a sensible way to break into the wealth transfer business by putting emphasis on the next generation of clients and ensuring that UnionBank will be among the next generation of private banks of choice.

While still relatively new to the wealth and asset management landscape in the Philippines, UnionBank Private Banking understands the importance of pairing global expertise and networks with local experience and relationships, thus establishing an academy for the Next Generation – the first-of-its-kind in the local private banking landscape.

“We want to be a part of our client’s wealth management journey, to grow, to keep and to pass on their wealth to their successors. This award is an affirmation of UnionBank Private Banking’s commitment to unlock possibilities and empower our clients to navigate their wealth towards financial legacy,” said Atty. Arlene Agustin, UnionBank’s Private Banking head.

Starting as a standalone conference in 2016, the Next Generation Academy has evolved into a program of multiple relevant modules, spanning several months of classroom sessions and workshops.

What differentiates the program is that it mirrors the structure of an academy, wherein the so-called NextGen would enroll, attend, and actively participate in all the prescribed modules.

Each classroom session is carefully curated to focus on a certain aspect of wealth management and succession, allowing the participants to be fully immersed in the discussion.

The NextGen Academy is an excellent avenue for participants to gain valuable insights and training from subject matter experts to help prepare them not only for their roles in the family business, but also for the reins of their families’ legacies to be handed over to them.

The academy also allows the NextGen participants to further network and develop invaluable close ties with regional peers from Thailand, Indonesia, Taiwan, Singapore, Hong Kong, Japan, and China, among others, through a premier platform called the Masters Series that is organized by UnionBank Private Banking’s strategic ally, leading global wealth and asset manager Lombard Odier.