Global Banking Industry Tendency

Global banking involves similar operations as local banks do. However, global banking usually deals with money and foreign exchange; whereas local banks concentrate on lending, asset management and consulting services.

There are numerous ways in which you could segment the banking industry. One of the ways could be the sector in which the bank operates. For example, you could have agricultural banks (Credit Agricole) or employees bank (any credit union). You could also do the segmentation by fields of activities. Such as commercial banks (Citibank) or investment banks (Goldman Sachs). Commercial banking covers services such as cash management (money transfers, payroll services), credit services, deposit services and foreign exchange. Whereas, investment banking is in charge of services like asset securitization, coverage of mergers and acquisitions, securities underwriting, etc. However, because of the deregulation of the financial sector, some of the commercial and investment banking institutions are competing directly in money market operations, private placements, bonds underwriting, etc. It is, however, believed that all these segments are secondary to the geographical segmentation of the global banking industry.

Moreover, a big change in the structure of the global banking industry is the development of world Islamic banking. 10 years ago Islamic banks accounted for only US $50million, now they are spread in 75 countries and account for US $250million, which represents 15% of the global banking industry.