Finance Banking

Global Banking Industry

Published at 07/14/2011 12:35:22

As means to increase revenues, and play a bigger part on a global scale, many banking institutions are expanding beyond their borders, and establishing themselves in various centers all over the world. But on this path, banks are faced with many challenges, such as demanding customer requirements, efficiency targets, and the need to manage operational and reputational risk. In the course of this article, we shall endeavor to look at the method banks are used to expand globally, and their management.

Regardless of the various challenges faced by industry banking, opportunity for expansion still exists through taping new markets, technological advancements, and more personalized products to enhance relationships with customers. One of the main drivers for growth, in the global banking industry, comes as a result of a drop in cross-border investment barriers. Banks are able to expand abroad by acquiring or merging with banks in other countries. One key market that has generated a lot of interest in global finance is china. In the recent past, it has been able to achieve a massive amount of growth and it has a huge population to match that growth, which banks will seek to tap. Although, it still poses some amount of political risk, and structural industry challenges.

Thanks to technological advances, banks are able to find better ways to serve their customers, through faster, more efficient banking services on a 24 hour basis. Better services have fostered customer loyalty, and an increased market share in those foreign economies. Though there is no substitute for the “personal touch”, therefore, banks still have to ensure that their services centers are up to date suitable to serve their customers in the best way possible. Banks consider reputational risk to be of greater concern than liquidity and credit risk. As a result, global banks have placed the necessary safeguards to ensure data privacy and security.

Tips and comments:

In order to sustain operations, banks operating on a global scale should ensure to adapt local regulations stipulated by regulatory authorities. They should seek to promote compliance by adopting a principles driven approach to the standards, systems, and policies required to achieve compliance.