49 Banking Facts: Everything You Need To Know About The Banking Industry

The idea of banking systems has existed since the medieval period.

The first bank in the US was Philadelphia's Bank of North America. It was created in 1781, five years after the United States was founded.

By 1800, 30 banks had emerged in the US, and this number grew to around 1500-1600 on the eve of the Civil War in 1860. In 1907, the US banking system became the largest in the world. Following this, other countries came up with large banks, and now such systems have become a major part of every country's economy.

Replacing the traditional methods of banking, online banking is paving the way for regulating transactions in modern times. The advent of online banking exploded into the world along with the introduction of the internet. However, the shift away from in-person banking actually began a lot earlier than we think.

Online Banking Facts

Online banking was preceded by early financial services, where customers could use telephones to conduct banking. The introduction of online banking made banking a lot easier and revolutionized the sector as a whole. The ease of the system has contributed to its popularity.

The first bank in the world to provide online services was The United Bank of America. It started allowing computerized banking from home in the '80s.

The United Bank of America teamed up with an electrical store in Tennessee to produce an external device that could be fitted in computers to provide the facility of online banking.

Following a measure taken by the United Bank of America, the United Kingdom developed online banking in 1982.

In 1982, the Bank of Scotland introduced net banking by collaborating with British Telecom. This service was called homeline and involved connecting the television set to the phone.

The first bank to offer online payments from its website was Wells and Fargo in 1995. Its online banking methods could be used on computers, replacing telephones.

Many have now resorted to online banking as their main method of banking, and a survey in 2019 revealed that 95% of people in Norway depend on online banking as their main source of banking. Norway is one of the largest users of online banking.

Norway is closely followed by other European countries like Iceland (where 94% of the population engages in online banking) and Denmark (where the number is closer to 91%). In the UK, 75% of people use online banking methods.

India is the country that has the largest number of people who use online banking.

40% of people in the world use online banking regularly; this means 2 billion people around the world use net banking.

People check their bank accounts regularly on the internet.

In the UK, banking sites are the third most popular use of the internet behind email and online shopping.

The popularity of online transactions doubled in the last decade.

In the UK, two-thirds of the total population through online mode.

Only 23% of people within the age 75-79 use online banking, while only 14% of people over the age of 80 are comfortable with net banking.

Statistics say that about 87% of banking frauds are conducted via online banking.

Banking Industry Facts

The banking industry is a network of several financial institutions that serve the economy of the nation. They are licensed by the state, and the principal services offered by banks include transferring, storing, and managing various forms of wealth.

The services offered by banks differ according to the institutions. Time, jurisdiction, development of the economy, regulations in the industry, and communication also play a major role in the functioning of the banking industry.

Banks are profit-seeking organizations; they earn their income by charging loan takers more interest than what banks pay.

Banks act as financial intermediaries; they transfer funds from the savers to the users.

Large banks provide a wide range of services and products for people of varying financial situations. There are various account tiers in the larger banks.

The different tiers of bank accounts have different facilities, features, and fees so that everyone enjoys equal opportunities.

The US economy is dominated by four major banks; Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo.

The Industrial and Commercial Bank of China remained the largest bank in the world for almost a decade. It has around $4 trillion in assets.

ICBC has 17,000 branches in China, which helps in creating capital for helping companies issue stocks.

Households using a debit card increased from 7.9-9.8% within two years. A prepaid debit card is more common for lower-income group households.

The credit card has also become an important part of the industry; as credit card rewards improve in value, their usage has also increased.

The major source of income for banks is the fees and charges that they charge their customers. The fees structure changes at regular intervals, so make sure to avoid unexpected charges.

The National Bureau of Economic Research has forecasted that America's emphasis on expansion through investment will ultimately result in a slowdown of the economy.

Types of banking regulations include asset restrictions, conflict rules, interest rate ceilings, antitrust enforcement, and disclosure rules.

European Banking Sector Facts

Following the global financial crisis, the European banks in recent years have faced a tough time. The pandemic put to the test the regulations put on the banks of the US.

The facts about the banking sector of Europe come from the combined sources of public data as well as all the 32 national banks that are members of the EBF.

The total number of credit institutions in Europe has been down by 30% since 2008.

This is mainly because of the rapid growth of online operations of banking services online in the last decade.

The contraction in the European banking sectors continued from 2008 to 2019, both in terms of staff numbers and the number of branches.

Overall, the total assets contained with the European banks stayed constant from 2014 till 2019.

In 2020, the loan portfolio of banks continued to improve in Europe in the first quarter because of the loans granted to big companies and businesses, as well as a decline in nonperforming loans. The overall profitability of banks also increased.

The total number of banks and credit institutions in the European Union decreased to approximately 5400 because of competition and instability in 2020.

A major impact of the outbreak of the Covid 19 virus was a surge in market volatility following a coordinated response from the European authorities.

Several policies by the European sectors like monetary policy drive, regulatory fixes, supervisory flexibility, and significant support for recovery funds helped the economy to thrive in the pandemic.

Total deposits from companies and households in the European territory grew by 4.7% and accounted for 13.1 trillion Euro deposits within the territory.

The value of loans given to the household increased to 8.7 trillion Euro and by 4.8%.

Mobile Banking Facts

As technology continues to evolve, it has also affected the retail banking system of the world. Online banking has existed since the '90s; however, the surge in this mode of banking boomed when people got the facility to connect their smartphone with their bank account.

Mobile banking has captured the entire process of in-person banking within a few clicks on your phone.

Thanks to the millennials, in 2015, the number of mobile bankers increased compared to the number of people visiting branches.

A total of 75% of the younger generation relies on a banking app to pay bills, view bills, and set up automated recurring payments.

The COVID-19 pandemic in 2020 enhanced the popularity of mobile banking in developing countries as well.

In 2021, statistical data showed that there were 5.22 billion unique mobile banking users.

The total value of transactions made by online banking will reach 503 billion dollars in 2020.

Bank of America has the highest number of mobile bankers. It is an industry leader with 30 million active users.

Statistics show that people within the age group of 25 to 34 are the most compatible with mobile banking. 93% of people within this age group do their banking online.

Owing to its large population and growing economy, more than 150 million Indian people now use mobile banking for financial transactions.

The value of banking frauds has also increased over the years because of the increase in mobile banking.

Approximately one in every 20 accounts hacks is related to the use of a rogue mobile app.

The value of fraud transactions through a mobile app has increased by 600% since 2015. Statistical data say that 89% of the frauds are due to account takeovers.

The total value of mobile banking frauds exceeded 40 million dollars across 14,392 branches all over the world in 2019.

Yet, mobile banking apps are an integral part of a bank now. 85% of people believe they will be a dominant interface in the future for maintaining account transactions and bills.

FAQs

Q: What are four facts about banks?

A: Four facts about the banking sector are:

Around 17.1 trillion deposits in the world are held in banks.

There are approximately 55 million small business customers, while 251 million customers practice retail banking around the world.

Some of the largest banks of the world hail from the US, with JPMorgan Chase being the largest bank worldwide in terms of market capitalization.

94.6% of households around the world either have savings accounts or checking accounts.

Q: What are the three advantages of banking?

A: Three advantages of banking are:

It helps in saving and storing the wealth of a consumer safely.

A bank account also allows convenience. That is, you can pay easily with the help of a check or debit card if you have an account.

Maintaining a bank account is comparatively cheaper; they offer customers low-cost services.

Q: What is interesting about being a banker?

A: Working in a bank will increase your financial knowledge considerably; it will help you to make calculative financial decisions on your own. Apart from that, there are many job benefits of working in a bank.

For example, you can get access to life insurance, disability insurance, retirement plan, and flexible accounts that help in health care and child care. Some additional benefits include free financial services, paid time off, fitness programs, and assistance in adoption.

Q: Which was the first bank in the world?

A: The world's oldest bank of the present form is Banca Monte Dei Paschi di Siena or Berenberg Bank. The bank was probably founded in 1472, but the present form of transactions started in 1624.

Q: Why is banking important?

A: Banking plays an important role in connecting international and domestic payments. They match the creditors and borrowers, therefore, helping in debt collection. Banks create money in the economy.

Q: How do banks make money?

A: The main source of income for banks is the interest they earn by lending payments to a consumer or business. They make enough money from the service charges and fees.

The money they lend to the customers or businesses comes from the consumer funds, while the interest rate paid by banks is much less than the interest rate paid by the consumers.

Q: What do bankers do all day?

A: The most important job of the bankers is to interact with customers on a daily basis and assist their banking-related inquiries. They counsel the consumer in the services provided by banks and help them to set up a bank account or authorize loans or mortgages.

Q: What to study to work in a bank?

A: To be a good banker, you should have a specialization in management skills. A bachelor's degree in commerce, statistics, or economics will help you to understand the banking sector comfortably.

Q: How do banks affect the economy?

A: A bank is a key instrument in influencing the monetary policy of the economy; it plays a major role in helping the government to regulate inflation. The central bank of a nation controls the money supply nationally, following which the commercial banks facilitate money flow in the markets under their operations.