Banking Industry Analysis

1
Banking Industry Analysis

• Presented To
• Board of Directors of
• Fifth Third Bank

2
Purpose of Report

• Conduct a Banking Industry Analysis with a focus
  on
• Globalization
• Deregulation
• Technology

3
Topics Discussed

• History of Banking
• Banking Regulations and Deregulations
• Effects of Deregulation on Industry
• Globalization of Industry
• Banking Technology

4
History of Banking

• Panic of 1907
• Federal Reserve Act of 1913
• The Great Depression
• 9,000 of 25,000 banks closed
• Post WWII

5
History of Banking

• Modern banking
• Deregulation
• Bank transformation into supermarket
• Globalization
• As the economy has globalized, so has the banking
  industry

6
Regulations and Deregulations

• Glass Stegall Act 1933
• Gramm-Leach-Bliley Act 1999
• Allows the following to merge
• Banks
• Brokerages
• Investment banks
• Insurance Companies

7
Benefits of Legislation

• White House estimates it will save consumers 18
  Billion annually
• Keeps US firms competitive in todays global
  marketplace

8
Regulating Bodies

• FDIC Insures deposits and promotes safe banking
  practices
• Federal Reserve Acts as central bank promoting
  a stable monetary system

9
Regulating Bodies

• SEC Protect investors and maintain integrity of
  securities market
• OCC Charters, regulates, and supervises all
  national banks

10
Effects of Deregulations

• Savings and Loan industry no longer profitable
• Adapt to industry by offering other financial
  services
• Consolidation

11
Effects of Deregulations

• Bank fees
• Banks needed to replace revenue lost due to
  increased competition
• Common fees
• ATM, late payment fees, monthly service charges
  and minimum balance fees

12
Common Services

• Capital markets
• Asset management
• Mutual funds
• Investment banking
• Credit Cards (bankruptcy)

13
Marketing and Management Evolution

• Customers seek service
• vs.
• Clients are sought to be served
• Let things happen
• vs.
• Make things happen

14
International Banking

• What is International Banking?
• Opening of banks outside country of origin
• Mechanism by which one can maintain bank accounts
  outside their country of residence
• The competitive global market place requires
  banks to expand internationally

15
Global Marketplace

• With corporations conducting business overseas,
  banks must help these companies handle
  international business transactions.
• As banks and businesses work together, they take
  the first step into the heart of the competition
  for the new markets worldwide.

16
Foreign Exchange Market

• Foreign Market is increasing immensely
• The foreign exchange market is one of the most
  unpredictable aspects of international business
• Many banks now offer companies experienced
  foreign exchange traders to help them conduct
  business overseas.

17
International Retail Services

• Makes international travel easier
• Foreign Currency
• International travelers checks
• Domestic/International wire transfers

18
Banking Technologies

• The field of banking is experiencing rapid change
  due to developing technologies
• Traditional banks may become obsolete as less
  costly measures are implemented
• Internet banking is the wave of the future

19
Individual Technologies

• WingspanBank seeks to expand upon Bank Ones
  previously established website
• Intuit offers a comprehensive software package
  that is based on partnerships with numerous
  financial services

20
Individual Technologies

• Netzee offers community banks the technology
  needed to transform themselves to full service
  financial institutions
• W-Bank offers a wireless banking option

21
Banking in the Future

• Banking in the future will focus on offering the
  client fast and full service
• E-banking will be a major force in shaping the
  banks of the future
• Constant technological advancements in the field
  of financial services will continue to
  revolutionize the industry

22
Conclusion

• The financial service industry has undergone
  significant change
• Deregulation, globalization and technological
  advances have led to the growth and development
  of financial supermarkets