Essentials of Banking E-Book

Deborah K. Dilley

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 317

Veröffentlichungsjahr: 2012

Beschreibung

The essential guide for finance professionals in all industries for quick answers to banking questions, Essentials of Banking provides a nuts and bolts presentation explaining the regulatory, business, and people facts of the business of banking in a handy, concise format. It is the only guide you will need containing all the relevant facts of banking, all in one place.

Leseprobe

Contents

Preface

Chapter 1: Banking 101: Understanding the Basics

What Is a Bank?

Satisfying Customers’ Needs—Banking Is a Service Business

Summary

Chapter 2: Deposit Insurance and the Regulatory Environment: How Does It All Work?

Why Is Regulation Important?

Regulatory Agencies

Summary

Chapter 3: Understanding Banking Deposit Accounts, Interest Rates, and Limitations

Protecting Our Financial System

Account Categories

Computing Interest

Summary

Chapter 4: Regulatory Compliance: The Essentials

Important Consumer Protection Laws

Privacy Regulations

Right to Financial Privacy

Summary

Chapter 5: The Business of Banking and the Bank Secrecy Act

Money Laundering and the Law in Brief

Banking After the Bank Secrecy Act

Introduction to Record Keeping and Reporting Under the BSA

Summary

Chapter 6: The Banker: Knowledge, Skills, and Attitude

Marketing versus Business Development

Introductory Call or Letter

Analyzing Client Needs

Preparing the Presentation

Presentation Day

Making the Presentation

Closing the Sale

Follow-up and Service

Summary

Chapter 7: The Ethical Banker: An Introduction to Ethics

What Is “Ethics”?

Ethical Obligations

The Ethical Organization

Professional Code of Ethics

Responding to Unethical Behavior

Summary

Chapter 8: Managing Others: What Every Banker Needs to Know

What Is Supervision?

Communication

Delegation and Reporting

Project Management Skills

Advanced Supervision

Summary

Chapter 9: The Market: It’s Bigger than You Think

Introduction to Marketing

Marketing Plan

Customers: The Reason for Being in Business

Customer Economics

Competition

Getting the Word Out: Advertising

Public Relations and Publicity

Summary

Chapter 10: Customer Service: The Key Ingredient

Customer Service

Dealing with Challenging Customers

Customers Are Always Right

Follow Up and Follow Through

Summary

Chapter 11: Context and Content: Putting It All Together

Mastering the Business of Banking

Summary of Key Concepts

Online Tools

Index

Essentials Series

The Essentials Series was created for busy business advisory and corporate professionals. The books in this series were designed so that these busy professionals can quickly acquire knowledge and skills in core business areas.

Each book provides need-to-have fundamentals for those professionals who must:

Get up to speed quickly, because they have been promoted to a new position or have

broadened their responsibility scope

Manage a new functional area

Brush up on new developments in their area of responsibility

Add more value to their company or clients

Other books in this series include:

Essentials of Accounts Payable, Mary S. Schaeffer

Essentials of Balanced Scorecard, Mohan Nair

Essentials of Business Process Outsourcing, Robert L. Click and Thomas N. Duening

Essentials of Cash Flow, H. A. Schaeffer, Jr.

Essentials of Corporate Fraud, Tracey Coenen

Essentials of Corporate Governance, Sanjay Anand

Essentials of Corporate Performance Measurement, George T. Friedlob, Lydia L.F. Schleifer, and Franklin J. Plewa, Jr.

Essentials of Cost Management, Joe and Catherine Stenzel

Essentials of Credit, Collections, and Accounts Receivable, Mary S. Schaeffer

Essentials of Financial Analysis, George T. Friedlob and Lydia L.F. Schleifer

Essentials of Financial Risk Management, Karen A. Horcher

Essentials of Intellectual Property, Paul J. Lerner and Alexander I. Poltorak

Essentials of Knowledge Management, Bryan Bergeron

Essentials of Managing Treasury, Karen A. Horcher

Essentials of Patents, Andy Gibbs and Bob DeMatteis

Essentials of Sarbanes-Oxley, Sanjay Anand

Essentials of Supply Chain Management, 2nd Edition, Michael Hugos

Essentials of Trademarks and Unfair Competition, Dana Shilling

Essentials of XBRL, Bryan Bergeron

For more information on any of the above titles, please visit www.wiley.com

Copyright © 2008 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax [phone], or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data:

Dilley, Deborah K.

Essentials of banking / Deborah K. Dilley.

p. cm. – (Essentials series)

Includes index.

ISBN 978-0-470-17088-5 (pbk.)

1. Banks and banking—United States. 2. Banking law—United States. I. Title.

HG2491.D55 2008

332.10973–dc22

2007048498

To my parents, Rosemary and Walter Dilley

Acknowledgments

This book would never have been created without David Martin, John Voorhees, Lucas Freeman and Ken Rosenberg–the guiding forces behind Sage Online Learning, Ltd. Without them; I might never have sold Sage’s online library of courses to SmartPros, Ltd–the serendipity that led to this book! Thanks also to Halley Porter, Eric & Felicia Anderson and Jack Robson for the early years—your contributions stay in my heart.

This book was born from a belief that “one” book was needed for bankers and lay people alike that covered the essential elements of banking–products and services, compliance, business development, supervision, and marketing–all in one place. Thanks to Jack Fingerhut, President, SmartPros, Ltd for agreeing with this concept and introducing me to John DeRemigis at Wiley & Sons. John shepherded me through the process of creating the bones of the book and encouraged me to refine my ideas into a concrete structure.

At Wiley thank you also to Judy Howarth, Associate Editor, for guiding me through the manuscript process—an incredible challenge I am sure! You did what was needed–nudging and urgent prodding–whatever it took to move the book forward. Natasha Andrews-Noel, Production Editor at Wiley carried the book through production without missing a beat. I appreciate her clear communication style and “matter of fact” taskmaster, traits.

A lion’s share of the thanks goes to Julie Todd at SmartPros who juggled her full time “regular” job with the huge job of managing the manuscript’s word processing. Julie, Mark Tilley and Jack Fingerhut also spent many hours on the sometimes-tedious review of the manuscript and I am grateful for their patience and suggestions. I’d like to also acknowledge the original authors and contributors to the online courses. These courses laid the foundation for this book and some of the content is incorporated as it originally appeared.

I’d like to express my appreciation to my good friend, Ken Wachtel of Leland, Parachini, Steinberg, Matzger & Melnick, LLP of San Francis co for reviewing the book—some of it on vacation and in the midst of running for Mill Valley City Council (he won). Thanks to Jason and Leah, Leslie, Tammy, Michelle, Jacquie, Pam and Steffie for your encouragement.

And most important thanks to my son, Kenny and husband, Ken for enduring the many late nights and grumpy mornings as deadlines came and went. Your love, support and sense of humor got me through—as always

About the Author

Deborah K. Dilley, was President and CEO of Sage Online Learning, Inc., prior to its acquisition by SmartPros, Ltd. Ms. Dilley, who joined SmartPros in February 2006 as Director of SmartPros Banking is a seasoned financial services executive and senior manager with a successful two-decade career in the banking, high tech, and corporate training industries. Prior to founding Sage, Ms. Dilley served as Executive Vice President of Field Operations at an early-stage Internet startup offering content to the financial services industry. Ms. Dilley brings an in-depth knowledge of the regulatory demands and training requirements of the financial services industry as well as the technical know-how to deliver online learning reliably and effectively.

During her career in the financial services industry, Ms. Dilley held various senior management positions at Bankers Trust Company (now Deutsche Bank), First Interstate Bank, and Wells Fargo Bank and also served as Executive Vice President of Omega Performance Corporation, where she created and launched a new multimedia division delivering custom training solutions for customers such as State Farm, Fidelity Investments, Delta Airlines, and J. P. Morgan.

About SmartPros: SmartPros Banking is part of the Financial Services division of SmartPros Ltd. SmartPros, which was founded in 1981, is a leading provider of online Continuing Professional Education for professionals in banking, insurance, brokerage, accounting and finance. For more information on SmartPros and its online courses visit the SmartPros website at www.smartpros.com.

Preface

You don’t need to be a banker to realize the impact of the banking system and its repercussions in our everyday work and personal worlds. Whoever you are, and whatever your interest in learning about banking, you are participating in exciting times. Whether you are a teller in a bank located in a small agricultural community in the Midwest, a management trainee in a regional bank with offices throughout the Southeast, an employee in a bank that has locations across the United States and several foreign countries, or someone who simply needs to gain a better understanding of banking concepts, this book will introduce you to the world of banking by looking at the industry both from a historical and present-day perspective.

But what about the future? What will banking look like in 5, 10, or even 20 years? This is a tough question to answer, but we’ll explore the possibilities. Most certainly, banking in the future will be driven by competition in the business of banking and reinvented as banking functions continue to become fragmented among different types of financial institutions and nontraditional financial partners.

Trends in banking affect the future but, even more, they affect what you do today. More than looking at the future of banking, this book will be an invaluable reference for you in your day-to-day job responsibilities. We explore the basics of banking so that you will understand the various banking products and services that exist and the role of banks in financial intermediation. We also look at all aspects of the regulatory environment that surrounds the banking industry. This is the environment that provides the integrity that allows the banking system to operate as seamlessly as it does.

We also examine how the focus in banking has shifted from a historical product-driven focus to a customer-driven focus and how banking is using multiple channels to service customers rather than relying only on banking offices. And we explore how cross-industry affiliations may significantly change the face of banking in the next several decades. We also define banking jargon and common acronyms and place them into context.

In the end, you will come away with a greater understanding of banking functions and products and their relation to other financial business activities and be able to apply your knowledge in useful ways regardless of your chosen career path. You’ll have a guide that you can refer to that contains information about all of the relevant facts of banking in one place.

Chapter 1

Banking 101: Understanding the Basics

After reading this chapter, you will be able to:

Understand the origin of banking and how it has evolved.

Explain the role of banks in the creation of money.

Discuss the essential elements of electronic banking and funds transfers.

Recognize the role of banks in financial intermediation.

Describe the range of products and services offered by banks.

Understand how financial products and services satisfy the needs of customers.

What Is a Bank?

A bank is defined by Merriam-Webster’s online dictionary (www.merriamwebster.com) as “an establishment for the custody, loan, exchange, or issue of money, for the extension of credit, and for facilitating the transmission of funds.”

While they are simple to describe, the roles of banks, bankers, and banking are—for some—not as simple to understand.

“Banking” can be defined as “the business of banking,” a vibrant business that continually evolves to meet the latest financial needs and economic conditions. In order to understand how banking evolves, it is important to gain a broad understanding of financial concepts, fundamental banking functions, and the banking business in a technology-driven world.

From Barter to Payment Systems

Money is the basis of banking. And the basis of money is the need for a substitute for directly bartering for everything we need. “Barter” is defined as trading without the use of money—and it can be traced back to the very origin of civilization. Can you imagine how our economy would operate if we didn’t use money? You would either have to be completely self-sufficient or have to produce a good or service that you could trade for whatever you could not produce yourself. Most of us would spend our time making almost everything we needed (including growing food, building shelter, and making clothes) or working at a specialty that others needed so we could trade for many of the necessities of life. The specialties would be few. Our technological advances would be restricted by an incredibly inefficient system of exchanging goods and services.