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Application of Online Database in Banking System

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Suppose your personal important document is stored in an online database and has been connected to the web page with programming thus enabling you to see your personal important document. Think if the database software holding your important document to be full of securities. Only secure web database can save your document and it can be accessible to any part of the Globe. Besides your personal important document another significant application of online database is banking system that became integral part of every individual in modern banking system, whatever may be internet banking, mobile banking or another term used is core banking. Recent advancement of banking system like ATM, core banking using Information Technology people is very safe while they are traveling far way from home. It is still unsafe traveling with good amount of money, some time pulls your life in danger.

The main advantage of using an ATM is the fact that you can have access banking database up to certain level and as your requirement of cash in your bank account from any part of world, whenever you need it.

For instance, you are at a store that does not take checks or credit cards but it has an ATM, you can withdraw the money for your purchase. This also means you can travel anywhere without cash. If the location has an ATM and you have your ATM card, you can access your money instantly. Now days ATMs are not just technology you can use to access cash using online database software. Some ATMs you can transfer funds between accounts, buy stocks, check account balances and even buy stamps. All of these features can be accessed with one debit card or credit card and a PIN number. If you take measures to protect your PIN and account information, having access to an ATM is very convenient and makes life’s little emergencies far less challenging.

Cautions While Using ATM: You do need some carefulness when using an ATM. Identity thief in recent times using useless ATM receipts to get the bank account numbers of innocent customers. Consumers who have an ATM card are assigned a PIN to use when accessing their funds. Shoplifter sometimes stands close behind an ATM user to get this PIN, and then pinch his purse with the ATM card in it to cheat money from the account.

Investment Banking Interview Preparation

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For undergrads and MBA students, the news that they have been selected for an interview at an investment bank comes with both excitement and dread. A position as an analyst or associate in corporate finance can be the first step towards a highly successful and highly lucrative career. Investment banking interviews, however, can be some of the most intimidating interviews out there, so let’s take a look at how to get prepared.

Before we jump into interview practice mode, we should take a step back and think about how we want to come across in the interview. In short, investment banking candidates should come off as bright, confident and likable.

In the final cut of selecting a hire, investment banks have already determined which candidates are smart and capable, so the decision comes down to who they like the best. So in addition to knowing a thing or two, candidates must remember to come across as a fun person to work with as well.

Know Your Story

Like any interview, candidates should have stories prepared about their lives that discuss their past, present and future. These are great answers for the standard questions:

“Tell me about yourself.” Or “Walk me through your rsum.” “Why are you interested in investment banking or this firm?” “Where do you see yourself in five to ten years?”

Candidates are highly likely to receive these or similar questions in any interview, and having succinct, practiced answers to them will give the impression of a polished candidate.

Your past story should highlight events that have qualified you for or gotten you interested in investment banking. Your present story should demonstrate why you want the particular position, how it is a logical step from where you are coming from and perhaps touch on where you hope the position will lead.

Your future story should discuss how investment banking will lead to where you want to go. Good future ambitions might be a managing director position in investment banking, a principle at a private equity firm, a CFO or perhaps and entrepreneur. In any case, you should communicate that those are long-term ambitions and you look forward to the experiences you’ll have in the position you’re interviewing for.

Know the Industry and Firm

Where investment banking interviews begin to get trickier is that firms will expect you to know what you’re getting into. If you confuse an equity analyst position with an analyst position in corporate finance, for example, you will not make it any further in the process.

You should understand the major divisions within an investment bank – sales & trading, corporate finance, research, etc. You should understand the hierarchy of positions within corporate finance – analyst, associate, vice president, managing director – and what each position does.

At the macro level, you need to understand the major differences between bulge bracket investment banks, middle market and boutique investment banks. You should also have a good answer for why you would prefer one type over another (and be sure that you prefer the type you’re interviewing with).

Banking Technology Core Banking Solutions Vs. Pricing And Billing Solutions

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Banks have started realizing the importance of pricing as a banking enterprise entity. Core banking solutions fit well as technology solutions for banks’ day-to-day business.

However, the core banking solution itself cannot cater to all the fee-income needs of a bank. This is attributable to the complex nature of each bank with regard to its independent departments or business silos and their disparate systems. Over a period of time, what results is a severe inability to visualize the fee income or pricing of charges at the enterprise level.

How a Core Banking Solution Works
A core banking solution, often referred to as a CBS, typically has a GL subsystem at its core with plug-in satellite modules catering to the various divisions of the bank. The satellite modules, referred to as “modules,” cater to the business functionalities of the various lines of business of the bank. Typical CBS modules include but are not limited to:

Non-financial modules:

Customer definition and accounts
Customer limits definition, lines of credit, a central bank reporting structure
Messaging and advice
End-of-day processing modules, etc.

Financial modules:

Loans, deposits, money markets
Letters of credits and bills
Treasury
Liquidity management
Local payments and cross-border
payments
Nostro reconciliations
Interest and charge definitions, etc.

Each silo or line of business employs one or more of these modules to run its business. The modules are used to create contracts with customers at the branch level for various products. For example, a short-term, fixed-rate loan contract for the account of a large corporate customer has multiple components associated with it, such as the contract-principal component, tax component, interest component, product-preference component,
charge component, etc.

Transactions are generated at the component level during various events of the contract life cycle, such as contract initiation, booking, accrual, liquidation, rollover, advice generation, contract cancellation, etc. Such dollar (or any other currency) transactions hit the accounting and GL subsystem at the core. Thus, the core GL and accounting system ties the various silos together.

As we have seen, the CBS and its modules are used by the lines of business to manage customer contracts and their life cycles as well as most income classified as non-fee income.

Core Banking and Fee Income

The modules in a CBS have a charge component associated with a customer contract that allows the bank to charge fees. This charge component can generate transactions during various events. The charges, however, are only basic charges that could be required at an account-contract level.

In practice, there are multiple other fees and charge components that banks capture using multiple fringe systems in each silo.

The Limitations of Core Banking Solutions for Fee-Based Income

Fee-based income plays a significant role in the overall profitability of a bank. Limitations on the growth of traditional spread-based income have only led to an increase in the weight of fee-based income.

Hence, banks are looking for a way to view charge income at the enterprise level-i.e., a single-customer view of all of a bank’s fee-based income. This means there is a need for the ability to develop enterprise-level pricing strategies, charge the customer at the relationship level, give a bundled fee offering to the customer, etc. A CBS and its modules are not designed to cater to a need for enterprise-wide pricing and billing.

Conclusion

A core banking solution is mainly used to manage the spread-based income of a bank. The fact that the fee income of a bank is a key differentiator in terms of profitability only increases its importance in the current scenario.

Having an enterprise entity and pricing strategy is important to the fee-based income of a bank. A pricing and billing solution helps manage the fee income of a bank by providing a single-customer view of all charges across the bank’s product silos. A pricing and billing solution, hence, brings to the table a unique value addition to a bank by helping it maximize its fee income.
– BankingCrossing

Mathematics in Banking – Compound interest

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Mathematics in Banking – Compound interest

NO banking WITHOUT Mathematics.

Many of you would have learned about Simple interest and compound interest in your middle school. Simple interest is seldom used in practice. The concept of compound interest is used in banks and many financial institutions.

Let’s begin with the definition of -interest-.

Interest is a fee paid for a loan or an amount of money borrowed from a bank or other financial institution. Banks pay interest on money deposited by customers.

There are two types of interest, simple interest and compound interest.

Simple Interest

Simple interest is the interest paid only on the original principal. Simple interest is quite easy to calculate.

The simple interest formula is I = PRT

Where

I – simple interest P – Principal or the initial amount of money that was invested or borrowed R – Rate of interest as a decimal T – Time

Compound Interest

Compound interest involves paying interest upon interest. That is, compound interest is the interest calculated on the accrued unpaid interest and on the original principal. Compound Interest is a bit more complicated than Simple Interest.

The compound interest formula is:

A = P (1 + R) ^T, if the interest is compounded once a year

A = P [1 + (R/N)] ^NT, if the interest is compounded -N’ times a year

Where

A – Amount = Principal + interest P – Principal or the initial amount of money that was invested or borrowed R – Rate of interest as a decimal T – Time

When you deposit money in the bank, always choose the account that offers you compound interest. You would make a little more money with the compound interest account than the simple interest account.

Albert Einstein, the great scientist once quoted: “Compound interest is the eighth wonder of the world. He, who understands it, earns it … he who doesn’t … pays it-.

Let’s look at a couple of examples:

Mrs. Green deposited $5000 for 5 years at 4% simple interest. Calculate the amount of interest Mrs. Green will get back at the end of 5 years.

Let’s use the simple interest formula: I = PRT

Here: P = $5000, R = 4% = 0.04, T = 5 years

I = PRT = 5000 0.04 5 = 1000

So, Mrs. Green will receive $1000 at the end of 5 years.

Mrs. Green deposited $5000 for 5 years at 4% compounded quarterly. Calculate the amount of interest Mrs. Green will get back at the end of 5 years.

There are 4 quarters in a year. So, the interest is compounded 4 times a year.

Let’s use the compound interest formula: A = P[1 + (R/N)]^NT

Here: P = $5000, R = 4% = 0.04, N = 4, T = 5 years

A = P [1 + (R/N)] ^NT = 5000[1 + (0.04/4)] ^ (45) = 5000(1 + 0.01)^20 = 5000(1.01)^20 = 6100.95

So, Mrs. Green will receive $6100.95 – $5000 = $1100.95 at the end of 5 years.

Notice that Mrs. Green makes a little more money with compound interest.

Banks and other financial institutions use compound interest to calculate how much interest to be charged on a loan amount and how much interest to be paid on money deposited by customers. The more frequent the compounding, the more money you can make. The longer you allow your money to remain in the account, the greater is the final amount you receive.

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I’m Chandrajeet, an in-house writer for iCoachMath. iCoachMath is an effective, convenient, easy-to-use online Math Program which has been used by thousands of students, teachers, and parents. iCoachMath strives to lead K-12 students to excellence in math by offering quality web-based educational solutions. iCoachMath’s instructional and lesson materials are aligned to State Curriculum Standards in all 50 states (USA).
iCoachMath

Have You Ever Considered Private Banking –

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Most of us feel that taxes are one of the main barriers to true success with considerable sums of money having to go to various national institutions whenever we have profits coming our way. Another issue surrounding the financial sector is withdrawals and more specifically the inability to access large sums of your own money in a rapid manner without having to go through a painstaking and lengthy process. Using private banking – ??????????? as opposed to the traditional banking solutions, basically means that you will be taking your business to an offshore service provider that allows you rapid access to your funds whilst providing complete confidentiality. It also offers a wide range of investment choices not typically found with domestic banks.

There are numerous countries around the world that do not impose the same strict financial regulations as such high tax nations, and these countries have become heavens for investors from all over the world who are seeking ways to grow their portfolios without having to take on any additional risks. In addition these extra services provided by private banking firms ??????????? means that your money can access investments not normally found at domestic firms with lower minimums. For example many funds cater to large institutions with minimum investments of US$10,000,000 and the same investments can be accessed via private banking firms ??????????? for US$100,000.

The benefits of using private banking – ??????????? really start to become visible the more one utilizes them. Not only does private banking reduce the amount and quantum of the taxes you have become accustomed to paying but you also have more access to your funds. Moreover, by using private banking – ??????????? as an alternative to the traditional banking solutions available to you in your country of residence, you also receive easier access to profitable investment opportunities such as an offshore regular saving plan – ???????, offshore hedge funds and the list continues to include a large variety of other options that you may not even consider otherwise.

The most basic definition of private banking – ??????????? is also the most correct one, which is that private banking – ??????????? is definitively a means of possessing and using bank accounts in other countries having a world of choice from one account with full confidentiality. Apart from the above enumerated benefits such as easier access to offshore regular saving plan – ??????? and other financial investment opportunities, private banking – ??????????? is also renowned for offering those interested a considerably increased level of privacy, a good level of security against instability, be it political, financial or local.

Also, this great option leads you to benefit from reduced restrictions from a legal standpoint. In terms of what you can actually expect from private banking – ??????????? or even investing in an offshore regular saving plan – ???????, you should know that they are very similar to the traditional options you have been using. The services are very similar and you can benefit from all the traditional benefits such as credit and debit cards that work anywhere in the world and so on.

In addition to all this, working with a well experienced service provider that has the expertise needed to provide high quality services, you can also increase your investment portfolio with an offshore regular saving plan – ???????, currency exchange plans, and much more.

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