The Impact Of Traditional Banking On Banking Essay

Acquiring a loan was once a long and arduous process involving heaps of confusing paperwork and more importantly time. If you walk away from the process without any hassles or hidden fees, then consider yourself lucky. Today the lending space is virtually unrecognizable thanks to the disruptive power of financial technology. Fintech is often associated with robo-advisors like Wealthfront and Betterment, but the truth is it started in the lending space. Now there are multiple technology based lending companies that cover everything from student loans to credit card debt. A lot of the marketplace lenders have made undoubtedly made it easier for consumers but it’s still too early to know whether its broader impact can shake traditional banking dynamics. Traditional Banking Before taking a dive into the opportunities forming in lending marketplaces, it’s helpful to understand the basics of traditional banking. When a bank makes a loan to a customer this simultaneously creates a liability for obviously the borrower but also the bank. By extending a loan the bank has now created an asset equal to the amount of the loan and a liability equal to the deposit. Deposits are simply funds that customers hold in an account that banks use to make loans. Banks reciprocate account holders for this with a very small interest payment that often goes unnoticed because it is so small. That doesn’t mean financial institutions have free reign over its customer’s funds. Financial regulationsShow MoreRelatedRole of It in Banks1560 Words   |  7 PagesRole of Information Technology (IT) in the Banking Sector Banking environment has become highly competitive today. To be able to survive and grow in the changing market environment banks are going for the latest technologies, which is being perceived as an ‘enabling resource’ that can help in developing learner and more flexible structure that can respond quickly to the dynamics of a fast changing market scenario. It is also viewed as an instrument of cost reduction and effective communication withRead MoreThe Internet And Other Electronic Media1245 Words   |  5 Pagesother electronic media have had a positive impact on the lives of individuals and businesses all over the world. Online banking is a phenomena that was established to make the banking services easier and accessible for the customers. In Saudi Arabia, many people prefer wait in the bank to pay their bills rather than doing it online. 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However Atwima Kwanwoma Bank has none of the aboveRead More2.1Literature Review Technology has always been a major driver of bringing changes and making1200 Words   |  5 Pagesreshaped practically every component of our lives. With the boom of new technologies such as Internet and mobile phone it reshaped the banking of today from traditional banking to e-banking. Online banking is characterized as the services provided by the banks to its customers through the Internet. (Geyskens, I., Gie1ens, K., and Dekimpe, M.G). 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Latest episode has definitely showed that status of economic as well as the financial performance is greatly affected by financial turmoil. During the crisis, world stock markets have been collapsed, largest financial institutions have been bought out or fallen, and the wealthiest nations like UAE, UK of USA had to stand up and aid their financial systems as well asRead MoreWhat Are No Restrictions On New Financial Service Institutions?932 Words   |  4 Pagesindustry each year. However, the regulatory burden placed on financial institutions has controlled, or perhaps diminished, the number of new bank charters over the last 10 years (Adams Gramlich, 2014). This is particularly true for the smaller, traditional banks and a result of regulatory demand placed on the financial services industry since the 2008 financial crisis. Prior to 2008, the annual new charte rs were in the triple digits; however, ten years later new charters have declines into the singleRead MoreIndian Banking : Growth And Trends Essay1298 Words   |  6 PagesREVIEW OF LITERATURE A. Indian Banking Industry- Growth and Trends in Productivity Singh Jagwant (1993) in his book is concerned with trends and changes in productivity with particular emphasis on employee and branch productivity in the Indian banking industry. It determines the level of productivity and its growth during the period 1969-85. The 22 public sector banks i.e. banks of the SBI group and 14 nationalised in 1969 have been taken up for the study. The study attempts to make cross-sectional