Types of Financial Services Provided by Banks


Types of Financial Services Provided by Banks

Financial Services identifies the financial services offered by the financial sector. These can be the actions of a conventional bank such as purchasing and selling loans, checking accounts and securities; or the actions of an investment banker such as trading in shares or securities or otherwise underwriting the sale and purchase of securities. A financial services firm offers investment advice on the buying and selling of these securities. Other services may include the provision of loan underwriting services, insurance underwriting services, and estate planning and probate services.

Commercial Finance involves the large-scale sales of financial products to other firms. Such purchases may involve purchasing financial products such as corporate bonds, commercial mortgage backed securities (CMBS) and commercial interest rate securities (CIRES). Some examples of commercial investments include corporate equities, venture capital, property and equipment leasing, and financial investments such as derivatives. Other types of commercial finance include merchant financing, bank financing, and private investor financing. Other areas of commercial finance include corporate finance, seller financing, and debtor financing.

The commercial banking industry is the major provider of bank financing with the leading financial institutions in the United States accounting for over 70% of banking assets. The commercial banking industry includes commercial banks, credit unions, savings and loans, trust companies, and prepaid card companies. The commercial lending industry is further divided into non-traditional and traditional banking. Non-traditional banking includes broker dealers, commercial real estate bankers, and non-US depository receipts brokers.

Savings and Loan Services are a subset of savings and loan services and are the most common financial services industry segment in the US. Savings and loans provide a number of financial products to consumers including savings accounts, certificate of deposits (CDs), direct savings accounts, and various other select financial products. They also make a number of financial services to businesses and organizations. Many banks offer financial services including debt consolidation, business lines of credit, merchant financing, and international finance and merchant cash advances. Some banks focus on one particular industry such as commercial real estate banking.

Business Line of Credit (BLOC) is a financial service that provides small businesses acquire short-term financial goods and funds. Most banks offer some form of BLOC program to help their small business owners meet their financial needs. Commercial real estate lenders are a significant portion of the commercial lending sector and have played an important role in helping businesses acquire financial goods and services.

Wealth Management refers to both personal wealth management and investment wealth management. Wealth management can involve the process of building an estate portfolio or creating a specialized portfolio that includes investments in stocks, bonds, mutual funds, and real estate properties. Successful investors generally build multiple portfolios, which are normally designed to meet different needs and financial goals. The various types of financial services provided by banks include savings, investing, credit cards, loans, mortgages, and the Internet.