Trends in Banking Industry

Globalization: 

Banking is an international business as well and becoming more so all the time. Technology has allowed instant communication as well as the transfer of funds, so barriers of geography apply less than ever. Most of the commercial banks actively seek international business, putting together huge investment transactions overseas, and engaging in investment banking. 

Technology: 

As with many industries, technology has changed everything. Perhaps no business has been more affected by the growth of computers and telecommunications than banking. Not only have accounting, auditing, and examining functions been taken over by fast and efficient technology, funds transfer, record keeping, and financial analyses have become instantaneous because of the powerful tools now available. 

Technology's changes are not limited to bankers either. Consumers' relationships with their banks have changed also. Gone are the banker's hours of 9:00 a.m. to 3:00 p.m., for consumers want instantaneous access to banking services just as they do from other businesses. They want access to their money at any time. Automated teller machines (ATMs), networked computers that allow access from around the world, "smart" cards with embedded microchips, and online banking via the Internet are some of the technological innovations changing the face of banking. 

Competition: 

Banking is a business, and as with any business, competition is an ongoing challenge. As government regulations have loosened, competition between banks has become fiercer. This fact has resulted in mergers and decreasing numbers of banks, but it has also made more services available to consumers, as banks compete to earn customers' financial business. Banks compete not only with other banks but with other businesses that sell financial services, such as credit unions. Banks are more sales-oriented than ever; with an emphasis on service, innovation, and marketing that could scarcely have been imagined 30 years ago.

Mergers & Consolidation: 

One of the most significant changes in banking in the last twenty years has been the number of mergers. A merger occurs when one or more banks join or acquire another bank or banks. Mergers increase the size of banks, giving them more resources. Mergers also decrease the number of banks.