Business

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A business (also known as an enterprise, a company, or a firm) is an organizational entity and legal entity made up of an association of people, be they natural, legal, or a mixture of both who share a common purpose and unite in order to focus their various talents and organize their collectively available skills or resources to achieve specific declared goals and are involved in the provision of goods and services to consumers. A business can also be described as an organization that provides goods and services for human needs.

A company or association of persons can be created at law as legal person so that the company in itself can accept limited liability for civil responsibility and taxation incurred as members perform (or fail) to discharge their duty within the publicly declared "birth certificate" or published policy.

Because companies are legal persons, they also may associate and register themselves as companies - often known as a corporate group. When the company closes it may need a "death certificate" to avoid further legal obligations.

Businesses serve as conductors of economic activity, and are prevalent in capitalist economies, where most of them are privately owned and provide goods and services allocated through a market to consumers and customers in exchange for other goods, services, money, or other forms of exchange that hold intrinsic economic value.

Businesses may also be social nonprofit enterprises or state-owned public enterprises operated by governments with specific social and economic objectives.

A business owned by multiple private individuals may form as an incorporated company or jointly organized as a partnership. Countries have different laws that may ascribe different rights to the various business entities.

The word "business" can refer to a particular organization or to an entire market sector (for example, "the finance business" is "the financial sector") or to all economic sectors collectively ("the business sector"). Compound forms such as "agribusiness" represent subsets of the concept's broader meaning, which encompasses all activity by suppliers of goods and services.

Typically private-sector businesses aim to maximize their profit, although in some contexts they may aim to maximize their sales revenue or their market share. Government-run businesses may aim to maximize some measure of social welfare.

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Etymology

The English word company has its origins in the Old French military term campaign (first recorded in 1150), meaning a "body of soldiers", and originally from the Late Latin word companio "companion, one who eats bread [pane] with you", first attested in the Lex Salica as a calque of the Germanic expression *gahlaibo (literally, "with bread"), related to Old High German galeipo "companion" and Gothic gahlaiba "messmate". By 1303, the word referred to trade guilds. Usage of company to mean "business association" was first recorded in 1553, and the abbreviation "co." dates from 1769.

The Old English signs (Northumbrian) "care, anxiety, occupation," from being "careful, anxious, busy, occupied, diligent" (see busy (adj.)) + -ness. Middle English sense of "state of being much occupied or engaged" (mid-14c.) is obsolete, replaced by busyness.

The sense of "a person's work, occupation" is first recorded late 14c. (in late Old English big (adj.) appears as a noun in the sense "occupation, state of employment"). Meaning "what one is about at the moment" is from the 1590s. The sense of "trade, commercial engagements" is first attested 1727.

Maps Business

Forms

Forms of business ownership vary by jurisdiction, but several common entities exist:

• Sole proprietorship: A sole proprietorship, also known as a sole trader, is owned by one person and operates for their benefit. The owner operates the business alone and may hire employees. A sole proprietor has unlimited liability for all obligations incurred by the business, whether from operating costs or judgments against the business. All assets of the business belong to a sole proprietor, including, for example, computer infrastructure, any inventory, manufacturing equipment, or retail fixtures, as well as any real property owned by the sole proprietor.
• Partnership: A partnership is a business owned by two or more people. In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business. The three most prevalent types of for-profit partnerships are: general partnerships, limited partnerships, and limited liability partnerships.
• Corporation: The owners of a corporation have limited liability and the business has a separate legal personality from its owners. Corporations can be either government-owned or privately owned. They can organize either for profit or as nonprofit organizations. A privately owned, for-profit corporation is owned by its shareholders, who elect a board of directors to direct the corporation and hire its managerial staff. A privately owned, for-profit corporation can be either privately held by a small group of individuals, or publicly held, with publicly traded shares listed on a stock exchange.
• Cooperative: Often referred to as a "co-op", a cooperative is a limited-liability business that can organize as for-profit or not-for-profit. A cooperative differs from a corporation in that it has members, not shareholders, and they share decision-making authority. Cooperatives are typically classified as either consumer cooperatives or worker cooperatives. Cooperatives are fundamental to the ideology of economic democracy.
• Limited liability companies (LLC), limited liability partnerships, and other specific types of business organization protect their owners or shareholders from business failure by doing business under a separate legal entity with certain legal protections. In contrast, unincorporated businesses or persons working on their own are usually not as protected.
• Franchises: A franchise is a system in which entrepreneurs purchase the rights to open and run a business from a larger corporation. Franchising in the United States is widespread and is a major economic powerhouse. One out of twelve retail businesses in the United States are franchised and 8 million people are employed in a franchised business.

• A company limited by guarantee. Commonly used where companies are formed for noncommercial purposes, such as clubs or charities. The members guarantee the payment of certain (usually nominal) amounts if the company goes into insolvent liquidation, but otherwise, they have no economic rights in relation to the company. This type of company is common in England. A company limited by guarantee may be with or without having share capital.
• A company limited by shares. The most common form of the company used for business ventures. Specifically, a limited company is a "company in which the liability of each shareholder is limited to the amount individually invested" with corporations being "the most common example of a limited company." This type of company is common in England and many English-speaking countries. A company limited by shares may be a
  • publicly traded company or a
  • privately held company.
• A company limited by guarantee with a share capital. A hybrid entity, usually used where the company is formed for noncommercial purposes, but the activities of the company are partly funded by investors who expect a return. This type of company may no longer be formed in the UK, although provisions still exist in law for them to exist.
• A limited liability company. "A company--statutorily authorized in certain states--that is characterized by limited liability, management by members or managers, and limitations on ownership transfer", i.e., L.L.C. LLC structure has been called "hybrid" in that it "combines the characteristics of a corporation and of a partnership or sole proprietorship". Like a corporation, it has limited liability for members of the company, and like a partnership it has "flow-through taxation to the members" and must be "dissolved upon the death or bankruptcy of a member".
• An unlimited company with or without a share capital. A hybrid entity, a company where the liability of members or shareholders for the debts (if any) of the company are not limited. In this case doctrine of a veil of incorporation does not apply.

Less common types of companies are:

• Companies formed by letters patent. Most corporations by letters patent are corporations sole and not companies as the term is commonly understood today.
• Charter corporations. Before the passing of modern companies legislation, these were the only types of companies. Now they are relatively rare, except for very old companies that still survive (of which there are still many, particularly many British banks), or modern societies that fulfill a quasi-regulatory function (for example, the Bank of England is a corporation formed by a modern charter).
• Statutory companies. Relatively rare today, certain companies have been formed by a private statute passed in the relevant jurisdiction.

Note that "Ltd after the company's name signifies limited company, and PLC (public limited company) indicates that its shares are widely held."

In legal parlance, the owners of a company are normally referred to as the "members". In a company limited or unlimited by shares (formed or incorporated with a share capital), this will be the shareholders. In a company limited by guarantee, this will be the guarantors. Some offshore jurisdictions have created special forms of offshore company in a bid to attract business for their jurisdictions. Examples include "segregated portfolio companies" and restricted purpose companies.

There are, however, many, many sub-categories of types of company that can be formed in various jurisdictions in the world.

Companies are also sometimes distinguished for legal and regulatory purposes between public companies and private companies. Public companies are companies whose shares can be publicly traded, often (although not always) on a stock exchange which imposes listing requirements/Listing Rules as to the issued shares, the trading of shares and future issue of shares to help bolster the reputation of the exchange or particular market of an exchange. Private companies do not have publicly traded shares, and often contain restrictions on transfers of shares. In some jurisdictions, private companies have maximum numbers of shareholders.

A parent company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors; the second company being deemed as a subsidiary of the parent company. The definition of a parent company differs by jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction.

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Classifications

• Agriculture, such as the domestication of fish, animals and livestock, as well as lumber, oil and mining businesses that extract natural resources and raw materials, such as wood, petroleum, natural gas, ores, plants or minerals.
• Financial services businesses include banks, brokerage firms, credit unions, credit cards, insurance companies, asset and investment companies such as private equity firms, private equity funds, real estate investment trusts, sovereign wealth funds, pension funds, mutual funds, index funds, and hedge funds, stock exchanges, and other companies that generate profits through investment and management of capital.
• Entertainment companies and mass media agencies generate profits primarily from the sale of intellectual property. They include film studios and production houses, mass media companies such as cable television networks, online digital media agencies, talent agencies, mobile media outlets, newspapers, book and magazine publishing houses.
• Industrial manufacturers produce products, either from raw materials or from component parts, then export the finished products at a profit. They include tangible goods such as cars, buses, medical devices, glass, or aircraft.
• Real estate businesses sell, invest, construct and develop properties, including land, residential homes, and other buildings.
• Retailers, wholesalers, and distributors act as middlemen and get goods produced by manufacturers to the intended consumers; they make their profits by marking up their prices. Most stores and catalog companies are distributors or retailers.
• Transportation businesses such as railways, airlines, shipping companies that deliver goods and individuals to their destinations for a fee.
• Utilities produce public services such as water, electricity, waste management or sewage treatment. These industries are usually operated under the charge of a public government.
• Service businesses offer intangible goods or services and typically charge for labor or other services provided to government, to consumers, or to other businesses. Interior decorators, beauticians, hairstylists, make-up artists, tanning salons, laundromats, dry cleaners, and pest controllers are service businesses.

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Activities

Accounting

Accounting is the measurement, processing and communication of financial information about economic entities such as businesses and corporations. The modern field was established by the Italian mathematician Luca Pacioli in 1494. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of users, including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms.

Finance

Finance is a field that deals with the study of investments. It includes the dynamics of assets and liabilities over time under conditions of different degrees of uncertainty and risk. Finance can also be defined as the science of money management. Finance aims to price assets based on their risk level and their expected rate of return. Finance can be broken into three different sub-categories: public finance, corporate finance and personal finance.

Manufacturing

Manufacturing is the production of merchandise for use or sale using labour and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale.

Marketing

Marketing is defined by the American Marketing Association as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." The term developed from the original meaning which referred literally to going to a market to buy or sell goods or services. Marketing tactics include advertising as well as determining product pricing.

With the rise in technology, marketing is further divided into a class called digital marketing. It is marketing products and services using digital technologies.

Research and development

Research and development refer to activities in connection with corporate or government innovation. Research and development constitute the first stage of development of a potential new service or product. Research and development are very difficult to manage since the defining feature of the research is that the researchers do not know in advance exactly how to accomplish the desired result.

Safety

Safety is a key business concept that is defined by Merriam-Webster as "the condition of being safe from undergoing or causing hurt, injury, or loss". Injuries cost businesses billions of dollars annually. Studies have shown how company acceptance and implementation of comprehensive safety and health management systems reduces incidents, insurance costs and workers' compensation claims. New technologies, like wearable safety devices and available online safety training, continue to be developed to encourage employers to invest in protection beyond the "canary in the coalmine" and reduce the cost to businesses of protecting their employees.

Sales

Sales are activity related to selling or the amount of goods or services sold in a given time period.

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Management

The efficient and effective operation of a business, and study of this subject, is called management. The major branches of management are financial management, marketing management, human resource management, strategic management, production management, operations management, service management, and information technology management.

Owners may manage their businesses themselves, or employ managers to do so for them. Whether they are owners or employees, managers administer three primary components of the business' value: financial resources, capital (tangible resources), and human resources. These resources are administered in at least six functional areas: legal contracting, manufacturing or service production, marketing, accounting, financing, and human resources.

Restructuring state enterprises

In recent decades, states modeled some of their assets and enterprises after business enterprises. In 2003, for example, the People's Republic of China modeled 80% of its state-owned enterprises on a company-type management system. Many state institutions and enterprises in China and Russia have transformed into joint-stock companies, with part of their shares being listed on public stock markets.

Business process management (BPM) is a holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients. BPM attempts to improve processes continuously. It can, therefore, be described as a "process optimization process". It is argued that BPM enables organizations to be more efficient, effective and capable of change than a functionally focused, traditional hierarchical management approach.

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Organization and regulation

Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of commercial law for each type.

The major factors affecting how a business is organized are usually:

• The size and scope of the business firm and its structure, management, and ownership, broadly analyzed in the theory of the firm. Generally, a smaller business is more flexible, while larger businesses, or those with wider ownership or more formal structures, will usually tend to be organized as corporations or (less often) partnerships. In addition, a business that wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so.
• The sector and country. Private profit-making businesses are different from government-owned bodies. In some countries, certain businesses are legally obliged to be organized in certain ways.
• Tax advantages. Different structures are treated differently in tax law and may have advantages for this reason.
• Disclosure and compliance requirements. Different business structures may be required to make less or more information public (or report it to relevant authorities) and may be bound to comply with different rules and regulations.

Many businesses are operated through a separate entity such as a corporation or a partnership (either formed with or without limited liability). Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent and complying with certain other ongoing obligations. The relationships and legal rights of shareholders, limited partners, or members are governed partly by the charter documents and partly by the law of the jurisdiction where the entity is organized. Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person". This means that unless there is misconduct, the owner's own possessions are strongly protected in law if the business does not succeed.

Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located. No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located. A single person who owns and runs a business is commonly known as a sole proprietor, whether that person owns it directly or through a formally organized entity. Depending on the business needs, an adviser can decide what kind is proprietorship will be most suitable.

A few relevant factors to consider in deciding how to operate a business include:

1. General partners in a partnership (other than a limited liability partnership), plus anyone who personally owns and operates a business without creating a separate legal entity, are personally liable for the debts and obligations of the business.
2. Generally, corporations are required to pay tax just like "real" people. In some tax systems, this can give rise to so-called double taxation, because first the corporation pays tax on the profit, and then when the corporation distributes its profits to its owners, individuals have to include dividends in their income when they complete their personal tax returns, at which point a second layer of income tax is imposed.
3. In most countries, there are laws which treat small corporations differently from large ones. They may be exempt from certain legal filing requirements or labor laws, have simplified procedures in specialized areas, and have simplified, advantageous, or slightly different tax treatment.
4. "Going public" through a process known as an initial public offering (IPO) means that part of the business will be owned by members of the public. This requires the organization as a distinct entity, to disclose information to the public, and adhering to a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public LLC's that sell units (sometimes also called shares), and other more exotic entities as well, such as, for example, real estate investment trusts in the USA, and unit trusts in the UK. A general partnership cannot "go public".

Commercial law

A very detailed and well-established body of rules that evolved over a very long period of time applies to commercial transactions. The need to regulate trade and commerce and resolve business disputes helped shape the creation of law and courts. The Code of Hammurabi dates back to about 1772 BC for example, and contains provisions that relate, among other matters, to shipping costs and dealings between merchants and brokers. The word "corporation" derives from the Latin corpus, meaning body, and the Maurya Empire in Iron-Age India accorded legal rights to business entities.

In many countries, it is difficult to compile all the laws that can affect a business into a single reference source. Laws can govern treatment of labour and employee relations, worker protection and safety, discrimination on the basis of age, gender, disability, race, and in some jurisdictions, sexual orientation, and the minimum wage, as well as unions, worker compensation, and working hours and leave.

Some specialized businesses may also require licenses, either due to laws governing entry into certain trades, occupations or professions, that require special education or to raise revenue for local governments. Professions that require special licenses include law, medicine, piloting aircraft, selling liquor, radio broadcasting, selling investment securities, selling used cars, and roofing. Local jurisdictions may also require special licenses and taxes just to operate a business.

Some businesses are subject to ongoing special regulation, for example, public utilities, investment securities, banking, insurance, broadcasting, aviation, and health care providers. Environmental regulations are also very complex and can affect many businesses.

Capital

When businesses need to raise money (called capital), they sometimes offer securities for sale.

Capital may be raised through private means, by an initial public offering or IPO on a stock exchange, or in other ways.

Major stock exchanges include the Shanghai Stock Exchange, Singapore Exchange , Hong Kong Stock Exchange, New York Stock Exchange and NASDAQ (the USA), the London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and Bombay Stock Exchange (India). Most countries with capital markets have at least one.

Businesses that have gone public are subject to regulations concerning their internal governance, such as how executive officers' compensation is determined, and when and how information is disclosed to shareholders and to the public. In the United States, these regulations are primarily implemented and enforced by the United States Securities and Exchange Commission (SEC). Other western nations have comparable regulatory bodies. The regulations are implemented and enforced by the China Securities Regulation Commission (CSRC) in China. In Singapore, the regulatory authority is the Monetary Authority of Singapore (MAS), and in Hong Kong, it is the Securities and Futures Commission (SFC).

The proliferation and increasing complexity of the laws governing business have forced increasing specialization in corporate law. It is not unheard of for certain kinds of corporate transactions to require a team of five to ten attorneys due to sprawling regulation. Commercial law spans general corporate law, employment and labor law, health-care law, securities law, mergers and acquisitions, tax law, employee benefit plans, food and drug regulation, intellectual property law on copyrights, patents, trademarks, telecommunications law, and financing.

Other types of capital sourcing include crowdsourcing on the Internet, venture capital, bank loans, and debentures.

Intellectual property

Businesses often have important "intellectual property" that needs protection from competitors for the company to stay profitable. This could require patents, copyrights, trademarks, or preservation of trade secrets. Most businesses have names, logos, and similar branding techniques that could benefit from trademarking. Patents and copyrights in the United States are largely governed by federal law, while trade secrets and trademarking are mostly a matter of state law. Because of the nature of intellectual property, a business needs protection in every jurisdiction in which they are concerned about competitors. Many countries are signatories to international treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties. In order to protect trade secrets, companies may require employees to sign noncompete clauses which will impose limitations on an employee's interactions with stakeholders, and competitors.

Trade union

A trade union (or labor union) is an organization of workers who have come together to achieve common goals such as protecting the integrity of its trade, improving safety standards, achieving higher pay and benefits such as health care and retirement, increasing the number of employees an employer assigns to complete the work, and better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members (rank and file members) and negotiates labor contracts (collective bargaining) with employers. The most common purpose of these associations or unions is "maintaining or improving the conditions of their employment". This may include the negotiation of wages, work rules, complaint procedures, rules governing hiring, firing, and promotion of workers, benefits, workplace safety and policies.

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See also

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References

Media related to Business at Wikimedia Commons

Source of the article : Wikipedia

Mobile banking

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Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Unlike the related internet banking it uses software, usually called an app, provided by the financial institution for the purpose. Mobile banking is usually available on a 24-hour basis. Some financial institutions have restrictions on which accounts may be accessed through mobile banking, as well as a limit on the amount that can be transacted.

Transactions through mobile banking may include obtaining account balances and lists of latest transactions, electronic bill payments, and funds transfers between a customer's or another's accounts. Some apps also enable copies of statements to be downloaded and sometimes printed at the customer's premises; and some banks charge a fee for mailing hardcopies of bank statements.

From the bank's point of view, mobile banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit transactions. Mobile banking does not handle transactions involving cash, and a customer needs to visit an ATM or bank branch for cash withdrawals or deposits. Many apps now have a remote deposit option; using the device's camera to digitally transmit cheques to their financial institution.

Mobile banking differs from mobile payments, which involves the use of a mobile device to pay for goods or services either at the point of sale or remotely, analogously to the use of a debit or credit card to effect an EFTPOS payment.

Video Mobile banking

History

The earliest mobile banking services used SMS, a service known as SMS banking. With the introduction of smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers.

Mobile banking before 2010 was most often performed via SMS or the mobile web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special mobile apps, downloaded to the mobile device. With that said, advancements in web technologies such as HTML5, CSS3 and JavaScript have seen more banks launching mobile web based services to complement native applications. A recent study (May 2012) by Mapa Research suggests that over a third of banks have mobile device detection upon visiting the banks' main website. A number of things can happen on mobile detection such as redirecting to an app store, redirection to a mobile banking specific website or providing a menu of mobile banking options for the user to choose from.

Maps Mobile banking

A mobile banking conceptual

In one academic model, mobile banking is defined as:

Mobile Banking refers to provision and availment of banking- and financial services with the help of mobile telecommunication devices.The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customised information."

According to this model mobile banking can be said to consist of three inter-related concepts:

• Mobile accounting
• Mobile brokerage
• Mobile financial information services

Most services in the categories designated accounting and brokerage are transaction-based. The non-transaction-based services of an informational nature are however essential for conducting transactions - for instance, balance inquiries might be needed before committing a money remittance. The accounting and brokerage services are therefore offered invariably in combination with information services. Information services, on the other hand, may be offered as an independent module.

Mobile banking may also be used to help in business situations as well as financial

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Mobile banking services

Typical mobile banking services may include:

Account information

1. Mini-statements and checking of account history
2. Alerts on account activity or passing of set thresholds
3. Monitoring of term deposits
4. Access to loan statements
5. Access to card statements
6. Mutual funds / equity statements
7. Insurance policy management

Transaction

1. Funds transfers between the customer's linked accounts
2. Paying third parties, including bill payments and third party fund transfers(see, e.g., FAST)
3. Check Remote Deposit

Investments

1. Portfolio management services
2. Real-time stock

Support

1. Status of requests for credit, including mortgage approval, and insurance coverage
2. Check (cheque) book and card requests
3. Exchange of data messages and email, including complaint submission and tracking
4. ATM Location

Content services

1. General information such as weather updates, news
2. Loyalty-related offers
3. Location-based services

A report by the US Federal Reserve (March 2012) found that 21 percent of mobile phone owners had used mobile banking in the past 12 months. Based on a survey conducted by Forrester, mobile banking will be attractive mainly to the younger, more "tech-savvy" customer segment. A third of mobile phone users say that they may consider performing some kind of financial transaction through their mobile phone. But most of the users are interested in performing basic transactions such as querying for account balance and making bill

Future functionalities in mobile banking

Based on the 'International Review of Business Research Papers' from World business Institute, Australia, following are the key functional trends possible in world of Mobile Banking. With the advent of technology and increasing use of smartphone and tablet based devices, the use of Mobile Banking functionality would enable customer connect across entire customer life cycle much comprehensively than before.

Illustration of objective based functionality enrichment In Mobile Banking:

• Communication enrichment: - Video Interaction with agents, advisors.
• Pervasive Transactions capabilities: - Comprehensive "Mobile wallet"
• Customer Education: - "Test drive" for demos of banking services
• Connect with new customer segment: - Connect with Gen Y - Gen Z using games and social network ambushed to surrogate bank's offerings
• Content monetization: - Micro level revenue themes such as music, e-book download
• Vertical positioning: - Positioning offerings over mobile banking specific industries
• Horizontal positioning: - Positioning offerings over mobile banking across all the industries
• Personalization of corporate banking services: - Personalization experience for multiple roles and hierarchies in corporate banking as against the vanilla based segment based enhancements in the current context.
• Build Brand: - Built the bank's brand while enhancing the "Mobile real estate".

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Challenges for a mobile banking solution

Key challenges in developing a sophisticated mobile banking application are :

Handset accessibility

There are a large number of different mobile phone devices and it is a big challenge for banks to offer a mobile banking solution on any type of device. Some of these devices support Java ME and others support SIM Application Toolkit, a WAP browser, or only SMS.

Initial interoperability issues however have been localized, with countries like India using portals like "R-World" to enable the limitations of low end java based phones, while focus on areas such as South Africa have defaulted to the USSD as a basis of communication achievable with any phone.

The desire for interoperability is largely dependent on the banks themselves, where installed applications(Java based or native) provide better security, are easier to use and allow development of more complex capabilities similar to those of internet banking while SMS can provide the basics but becomes difficult to operate with more complex transactions.

There is a myth that there is a challenge of interoperability between mobile banking applications due to perceived lack of common technology standards for mobile banking. In practice it is too early in the service lifecycle for interoperability to be addressed within an individual country, as very few countries have more than one mobile banking service provider. In practice, banking interfaces are well defined and money movements between banks follow the IS0-8583 standard. As mobile banking matures, money movements between service providers will naturally adopt the same standards as in the banking world.

In January 2009, Mobile Marketing Association (MMA) Banking Sub-Committee, chaired by CellTrust and VeriSign Inc., published the Mobile Banking Overview for financial institutions in which it discussed the advantages and disadvantages of Mobile Channel Platforms such as Short Message Services (SMS), Mobile Web, Mobile Client Applications, SMS with Mobile Web and Secure SMS.

Security

As with most internet-connected devices, as well as mobile-telephony devices, cybercrime rates are escalating year-on-year. The types of cybercrimes which may affect mobile-banking might range from unauthorized use while the owner is using the toilet, to remote-hacking, or even jamming or interference via the internet or telephone network datastreams. In the banking world, currency rates may change by the millisecond.

Security of financial transactions, being executed from some remote location and transmission of financial information over the air, are the most complicated challenges that need to be addressed jointly by mobile application developers, wireless network service providers and the banks' IT departments.

The following aspects need to be addressed to offer a secure infrastructure for financial transaction over wireless network :

1. Physical part of the hand-held device. If the bank is offering smart-card based security, the physical security of the device is more important.
2. Security of any thick-client application running on the device. In case the device is stolen, the hacker should require at least an ID/Password to access the application.
3. Authentication of the device with service provider before initiating a transaction. This would ensure that unauthorized devices are not connected to perform financial transactions.
4. User ID / Password authentication of bank's customer.
5. Encryption of the data being transmitted over the air.
6. Encryption of the data that will be stored in device for later / off-line analysis by the customer.

One-time password (OTPs) are the latest tool used by financial and banking service providers in the fight against cyber fraud. Instead of relying on traditional memorized passwords, OTPs are requested by consumers each time they want to perform transactions using the online or mobile banking interface. When the request is received the password is sent to the consumer's phone via SMS. The password is expired once it has been used or once its scheduled life-cycle has expired.

Because of the concerns made explicit above, it is extremely important that SMS gateway providers can provide a decent quality of service for banks and financial institutions in regards to SMS services. Therefore, the provision of service level agreements (SLAs) is a requirement for this industry; it is necessary to give the bank customer delivery guarantees of all messages, as well as measurements on the speed of delivery, throughput, etc. SLAs give the service parameters in which a messaging solution is guaranteed to perform.

Scalability and reliability

Another challenge for the CIOs and CTOs of the banks is to scale-up the mobile banking infrastructure to handle exponential growth of the customer base. With mobile banking, the customer may be sitting in any part of the world (true anytime, anywhere banking) and hence banks need to ensure that the systems are up and running in a true 24 x 7 fashion. As customers will find mobile banking more and more useful, their expectations from the solution will increase. Banks unable to meet the performance and reliability expectations may lose customer confidence. There are systems such as Mobile Transaction Platform which allow quick and secure mobile enabling of various banking services. Recently in India there has been a phenomenal growth in the use of Mobile Banking applications, with leading banks adopting Mobile Transaction Platform and the Central Bank publishing guidelines for mobile banking operations.

Application distribution

Due to the nature of the connectivity between bank and its customers, it would be impractical to expect customers to regularly visit banks or connect to a web site for regular upgrade of their mobile banking application. It will be expected that the mobile application itself check the upgrades and updates and download necessary patches (so called "Over The Air" updates). However, there could be many issues to implement this approach such as upgrade / synchronization of other dependent components.

User adoption

It should be noted that studies have shown that a huge concerning factor of having mobile banking more widely used, is a banking customer's unwillingness to adapt. Many consumers, whether they are misinformed or not, do not want to begin using mobile banking for several reasons. These can include the learning curve associated with new technology, having fears about possible security compromises, just simply not wanting to start using technology, etc.

Personalization

It would be expected from the mobile application to support personalization such as :

1. Preferred Language
2. Date / Time format
3. Amount format
4. Default transactions
5. Standard Beneficiary list
6. Alerts

src: smedia2.intoday.in

Mobile banking in the world

This is a list of countries by mobile banking usage as measured by the percentage of people who had non-SMS mobile banking transactions in the previous three months. The data is sourced from Bain, Research Now and Bain along with GMI NPS surveys in 2012.

African nations such as Kenya would rank highly if SMS mobile banking were included in the above list. Kenya has 38% of the population as subscribers to M-Pesa as of 2011. Though as of 2016 mobile banking applications have seen a tremendous growth in kenyan banking sector who have capitalised on android play store and apple store to put their applications. Kenyan banks like Equity Bank Kenya Limited Eazzy banking application and The Co-operative Bank Mco-op cash application have proved to be a success mobile banking applications.

Mobile banking is used in many parts of the world with little or no infrastructure, especially remote and rural areas. This aspect of mobile commerce is also popular in countries where most of their population is unbanked. In most of these places, banks can only be found in big cities, and customers have to travel hundreds of miles to the nearest bank.

In Iran, banks such as Parsian, Tejarat, Pasargad Bank, Mellat, Saderat, Sepah, Edbi, and Bankmelli offer the service. Banco Industrial provides the service in Guatemala. Citizens of Mexico can access mobile banking with Omnilife, Bancomer and MPower Venture. Kenya's Safaricom (part of the Vodafone Group) has the M-Pesa Service, which is mainly used to transfer limited amounts of money, but increasingly used to pay utility bills as well. In 2009, Zain launched their own mobile money transfer business, known as ZAP, in Kenya and other African countries. Several other players in Kenya such as Tangerine, MobiKash and Funtrench Limited also have network-independent mobile money transfer. In Somalia, the many telecom companies provide mobile banking, the most prominent being Hormuud Telecom and its ZAAD service.

Telenor Pakistan has also launched a mobile banking solution, in coordination with Taameer Bank, under the label Easy Paisa, which was begun in Q4 2009. Eko India Financial Services, the business correspondent of State Bank of India (SBI) and ICICI Bank, provides bank accounts, deposit, withdrawal and remittance services, micro-insurance, and micro-finance facilities to its customers (nearly 80% of whom are migrants or the unbanked section of the population) through mobile banking.

In a year of 2010, mobile banking users soared over 100 percent in Kenya, China, Brazil and United States with 200 percent, 150 percent, 110 percent and 100 percent respectively.

Dutch Bangla Bank launched the very first mobile banking service in Bangladesh on 31 March 2011. This service is launched with 'Agent' and 'Network' support from mobile operators, Banglalink and Citycell. Sybase 365, a subsidiary of Sybase, Inc. has provided software solution with their local partner Neurosoft Technologies Ltd. There are around 160 million people in Bangladesh, of which, only 13 per cent have bank accounts. With this solution, Dutch-Bangla Bank can now reach out to the rural and unbanked population, of which, 45 per cent are mobile phone users. Under the service, any mobile handset with subscription to any of the six existing mobile operators of Bangladesh would be able to utilize the service. Under the mobile banking services, bank-nominated Banking agent performs banking activities on its behalf, like opening mobile banking accounts, providing cash services (receipts and payments) and dealing with small credits. Cash withdrawal from a mobile account can also be done from an ATM validating each transaction by 'mobile phone & PIN' instead of 'card & PIN'. Other services that are being delivered through mobile banking system are person-to-person (e.g. fund transfer), person-to-business (e.g. merchant payment, utility bill payment), business-to-person (e.g. salary/commission disbursement), government-to-person (disbursement of government allowance) transactions.

In May 2012, Laxmi Bank Limited launched the very first mobile banking in Nepal with its product Mobile Khata. Mobile Khata currently runs on a third-party platform called Hello Paisa that is interoperable with all the telecoms in Nepal viz. Nepal Telecom, NCell, Smart Tel and UTL, and is also interoperable with various banks in the country. The initial joining members to the platform after Laxmi Bank Limited were Siddartha Bank, Bank of Kathmandu, Commerz and Trust Bank Nepal and International Leasing and Finance Company.

Barclays offers a service called Barclays Pingit, and Hello Money offering services in Africa, allowing transfer of money from the United Kingdom to many parts of the world with a mobile phone. Pingit is owned by a consortium of banks. In April 2014, the UK Payments Council launched the Paym mobile payment system, allowing mobile payments between customers of several banks and building societies using the recipient's mobile phone number.

In Nov 2017 the State Bank of India launched an integrated banking platform in India called YONO offering conventional banking functions but also payment services for things such as online shopping, travel planning, taxi booking or online education.

src: www.yourhomebank.com

See also

• List of countries by mobile banking usage
• Mobile content
• Mobile Marketing
• Mobile payments
• Online banking
• SMS Banking

src: townsquarebank.com

Notes

src: www.primebank.com.np

References

• Vaidya (2011): "Emerging Trends on Functional Utilization of Mobile Banking in Developed Markets in Next 3-4 Years"
• Market Simplifed: "Mobile banking: A large number of financial services and technology firms have set their sights on integrating mobile devices into the broader, multi-trillion-dollar retail economy. As a result, the infrastructure and tools for safe, reliable mobile purchasing has been advancing rapidly in recent years setting the need for mCommerce along with mBanking."
• Tiwari, Rajnish and Buse, Stephan(2007): The Mobile Commerce Prospects: A Strategic Analysis of Opportunities in the Banking Sector, Hamburg University Press (E-Book as PDF to be downloaded)
• Tiwari, Rajnish; Buse, Stephan and Herstatt, Cornelius (2007): Mobile Services in Banking Sector: The Role of Innovative Business Solutions in Generating Competitive Advantage, in: Proceedings of the International Research Conference on Quality, Innovation and Knowledge Management, New Delhi, pp. 886-894.
• Tiwari, Rajnish; Buse, Stephan and Herstatt, Cornelius (2006): Customer on the Move: Strategic Implications of Mobile Banking for Banks and Financial Enterprises, in: CEC/EEE 2006, Proceedings of the 8th IEEE International Conference on E-Commerce Technology and The 3rd IEEE International Conference on Enterprise Computing, E-Commerce, and E-Services (CEC/EEE'06), San Francisco, pp. 522-529.
• Tiwari, Rajnish; Buse, Stephan and Herstatt, Cornelius (2006): Mobile Banking as Business Strategy: Impact of Mobile Technologies on Customer Behaviour and its Implications for Banks, in: Technology Management for the Global Future - Proceedings of PICMET '06.
• Owens, John and Anna Bantug-Herrera (2006): Catching the Technology Wave: Mobile Phone Banking and Text-A-Payment in the Philippines
• Ovum Analyst Research, European Retail Banking Investment Strategies (2013): [2]
• The Himalayan Times: http://www.thehimalayantimes.com/fullNews.php?headline=Dollar+at+historic+high&NewsID=381744

Source of the article : Wikipedia

Santander UK

src: c8.alamy.com

Santander UK plc is a British bank, wholly owned by the Spanish Santander Group. Santander UK plc manages its affairs autonomously, with its own local management team, responsible solely for its performance. Santander UK is one of the UK's leading personal financial services companies and one of the largest providers of mortgages and savings in the UK. The bank has circa 20,000 employees, 14 million active customers, with almost 1,010 branches and 50 corporate business centres.

The bank, with its head office in the London Borough of Camden, was established on 11 January 2010 when Abbey National plc was combined with the savings business and branches of Bradford & Bingley plc, and renamed Santander UK plc. Alliance & Leicester plc merged into the renamed business in May 2010.

Between 2007 and 2010, Santander was ranked as worst bank for customer service in the J. D. Power UK Retail Banking Satisfaction Study. However, its '123' product range was ranked third best in the UK in 2013 and in a moneysavingexpert.com poll in 2014 customers ranked their satisfaction higher than with any of other main high street banks.

In October 2011, Moody's downgraded the credit rating of 12 UK financial firms including Santander UK, blaming financial weakness. In June 2012, Moody rated Santander UK as being in a more financially healthy position than its parent company, Banco Santander. Less than 1% of Santander UK's business is held abroad.

Video Santander UK

History

Establishment

The bank has its origins in three constituent companies--Abbey National, Alliance & Leicester and Bradford & Bingley--all former mutual building societies. Abbey National, trading as Abbey, had been bought by the Santander Group in 2004 for £9 billion. Santander purchased Alliance & Leicester in mid-September 2008, followed by the branches and savings business of Bradford & Bingley which had been nationalised by HM Government during the 2008 banking crisis.

Abbey National and the savings business and branches of Bradford & Bingley were rebranded as Santander on 11 January 2010, and Abbey National plc was renamed Santander UK plc. Formula One driver Lewis Hamilton unveiled the first rebranded Santander branch that day in central London. A further 300 Abbey and Bradford & Bingley branches in London and south east England were rebranded that day, with branches in the rest of the UK following by the end of the month, by which time there were 1,045 Santander branches. Alliance & Leicester plc merged into the bank on 28 May 2010, and was rebranded by the end of the year.

The bank retained the London headquarters of Abbey National and renamed other regional buildings under its own name. The Abbey name was retained initially for Abbey International (now Santander Private Banking), and Abbey for Intermediaries (now Santander for Intermediaries), the division of the bank offering Abbey branded mortgages provided by Santander UK plc. The charitable divisions of Abbey, Bradford & Bingley and Alliance & Leicester were brought together to form the Santander Foundation.

Due to the three-way merger, Santander was in the unusual position of having more than one branch in many British high streets. In Northumerland Street, Newcastle upon Tyne, for example, there were three branches, which were formerly Abbey, Alliance & Leicester and Bradford & Bingley respectively. Plymouth city centre had four branches within 300 metres, two of which were adjacent to each other. In 2012, the bank began to reduce the number of duplicate branches, identifying 56 that would close. Staff in the branches selected for closure were moved to other nearby branches.

Alliance & Leicester Commercial Bank merged into Santander's business banking division, Santander Corporate Banking, in 2009.

Recent years

On 9 March 2010, Santander sold the investment and asset management business James Hay to IFG Group for £35 million. Later in the year, it was confirmed on 4 August that Santander would purchase the branches of The Royal Bank of Scotland in England and Wales, and the branches of NatWest in Scotland as part of a divestment of the business by The Royal Bank of Scotland Group. The deal collapsed on 12 October 2012.

Santander has frequently been rated the worst bank in the UK for customer service, although by July 2011 had sought to improve, notably by returning call centre operations to the UK from India. During 2011 the bank put aside £538m to cover claims from customers for the misselling of payment protection insurance (PPI), as did many other UK banks.

In December 2012, Santander reached an agreement to sell its store card business, which includes branded cards issued for retailers including Topshop, House of Fraser and Debenhams, to SAV Credit. The sale was completed on 13 May 2013, though Santander continued to service accounts on behalf of SAV Credit until 1 April 2014.

During 2014, the bank considered an initial public offering (IPO), expected to be completed within two years. In November 2014, the chief executive of the Santander Group admitted that an IPO would not be forthcoming until market conditions improved. This view was repeated in July 2015.

Maps Santander UK

Services

The bank provides a full range of personal, business and corporate accounts, including current accounts, mortgages, credit products and savings and investments. Santander operate online banking services, including mobile apps, and operate an internet-only banking division branded Cahoot. Mortgages are also provided through Santander for Intermediaries, a division of the bank used by brokers.

Santander's Corporate and Commercial Banking division operates from a number of regional business banking centres across the UK. In May 2013, Ana Botin announced plans to double the number of centres to 70 within three years.

Santander UK is authorised by the Prudential Regulation Authority and regulated by both the Financial Conduct Authority and the Prudential Regulation Authority. It is a member of the Financial Services Compensation Scheme, UK Payments Administration, Bankers' Automated Clearing Services (BACS), the Faster Payments Service, the Clearing House Automated Payment System (CHAPS), the Cheque and Credit Clearing Company, the British Bankers' Association and subscribes to the Lending Code.

The bank operates a branch on the Isle of Man, which is licensed by the Financial Supervision Commission. Santander's offshore private banking subsidiary Santander Private Banking operates in Jersey.

Six-digit account sort codes are used in the range between 09-00-xx to 09-19-xx. Sort codes for accounts formerly held by Alliance & Leicester use the range 09-01-31 to 09-01-36.

In 2009 Santander launched the UK's first current account without fees (including unauthorised overdrafts) for its current and future mortgage customers. Customers are not charged fees for using Santander's automated teller machines in Spain, which traditionally would incur fees for transactions in a foreign currency.

src: i.ytimg.com

Sponsorships

Santander has sponsored the McLaren Formula One team since 2007, and is also the title sponsor of the British Grand Prix. Santander said its sponsorship of McLaren had raised its brand awareness in the UK from 20 to 82 percent. The bank announced a second team sponsorship, with Scuderia Ferrari, in 2009.

Golfer Rory McIlroy signed a sponsorship agreement with the bank in September 2011, and in 2013 it was announced that British athlete Jessica Ennis-Hill would become a brand ambassador.

In February 2015, Santander was announced as the new sponsor of Transport for London's bicycle hire scheme, branded as Santander Cycles. Santander replaced Barclays as title sponsor.

src: www.mylifeinnumbers.co.uk

See also

• Banking in the United Kingdom
• List of banks in the United Kingdom

src: racing.herts.ac.uk

References

src: d.ibtimes.co.uk

External links

• Official website
• Santander Corporate and Commercial Banking
• Santander Private Banking
• Santander Foundation

Source of the article : Wikipedia

Banking in Switzerland

src: www.floridareview.com

Banking in Switzerland is regulated by the Swiss Financial Market Supervisory Authority (FINMA), which derives its authority from a series of federal statutes. The country's tradition of bank secrecy, which dates to the Middle Ages, was first codified in the Federal Act on Banks and Savings Banks, colloquially known as the Banking Law of 1934. The regime of bank secrecy that Swiss banks are famous for came under pressure in the wake of the UBS tax evasion scandal and the 1934 banking law was amended in 2009 to limit tax evasion by non-Swiss bank clients.

In 2015, banks represented 53.3% of the total value added of the Swiss financial sector, totalling CH?32 billion representing 5.12% of the country's GDP. UBS and Credit Suisse, the two largest banks in Switzerland, were ranked globally at #27 and #29 among banks, with assets of approximately US$941 billion and US$909 billion, respectively.

As of 11 October 2008, the banking industry in Switzerland has an average leverage ratio (assets/net worth) of 29 to 1, while the industry's short-term liabilities are equal to 260 percent of the Swiss GDP or 1,273 percent of the Swiss national debt.

Video Banking in Switzerland

History

Swiss mercenaries brought home funds from their contracts that helped Swiss banks begin. Banking began in the eighteenth century by way of the riches of merchants. Wegelin & Co., established in 1741, was the oldest bank in Switzerland until it restructured into a new legal entity in 2013. Hy Hentsch & Co. bank and Lombard Odier, were both founded in 1796 in Geneva as private banks, and The Pictet Group was established in 1805 as a merchant bank. Hentsch & Cie was a founding member of the Swiss National bank during 1852.

Maps Banking in Switzerland

Overview

Switzerland is a prosperous nation with a per capita gross domestic product higher than that of most Western European nations. In addition, the value of the Swiss franc (CHF) has been relatively stable compared with that of other currencies. In 2009, the financial sector comprised 11.6% of Switzerland's GDP and employed approximately 195,000 people (136,000 of whom work in the banking sector); this represents about 5.6% of the total Swiss workforce. Furthermore, Swiss banks employ an estimated 103,000 people abroad.

Swiss neutrality and national sovereignty, long recognized by foreign nations, have fostered a stable environment in which the banking sector was able to develop and thrive. Switzerland has maintained neutrality through both World Wars, is not a member of the European Union, and was not a member of the United Nations until 2002.

Currently an estimated one-third of all worldwide funds held outside their country of origin (sometimes called "offshore" funds) are kept in Switzerland. In 2001, Swiss banks managed US$2.6 trillion. The following year they handled US$400 billion less which has been attributed to both a bear market and stricter regulations on Swiss banking. By 2007 this figure has risen to roughly US$2.7 trillion, a record.

The Bank of International Settlements, an organization that facilitates cooperation among the world's central banks, is headquartered in the city of Basel. Founded in 1930, the BIS chose to locate in Switzerland because of the country's neutrality, which was important to an organization founded by countries that had been on both sides of World War I.

The Foreign Banks in Switzerland Association reported that from the start of 2012 to the end of May 2013, the number of foreign-owned private banks operating in Switzerland declined from 145 to 129 due to the roll-back of bank secrecy regulations. Over the preceding five years, the foreign banks' assets under management declined by 25% to CHF870.7 billion Swiss francs ($921 billion) due to their clients paying taxes or withdrawing their money. Foreign banks in Switzerland saw their pretax margin decline from 38 basis points in 2007 to 20 basis points in 2012.

src: i.cbc.ca

Law and regulation

The Swiss Financial Market Supervisory Authority (FINMA) is a public law institution that supervises most banking-related activities as well as securities markets and investment funds. Regulatory authority is derived from the Swiss Financial Market Supervision Act (FINMASA) and Article 98 of the Swiss Federal Constitution.

The office of the Swiss Banking Ombudsman, founded in 1993, is sponsored by the Swiss Banking Ombudsman Foundation, which was established by the Swiss Bankers Association. The ombudsman's services, which are offered free of charge, include mediation and assistance to persons searching for dormant assets. The ombudsman handles about 1,500 complaints raised against banks yearly.

On the 27th of May 2015, Switzerland signed an agreement with the EU that will align Swiss bank practices with those of EU countries, and in effect will end the special secrecy that EU-resident clients of Swiss banks had enjoyed in the past. Under the agreement, both Switzerland and EU countries will automatically exchange information on the financial accounts of each other's residents from 2018.

Statutes

In 1934, the Swiss Federal Assembly passed the Federal Act on Banks and Savings Banks (colloquially known as the Banking Law of 1934), which mainly concerned administrative matters such as bank supervision. A still widely accepted canard is that the secrecy provisions of the 1934 bill were motivated by attempts by Nazi Germany to investigate the assets of Jews and "enemies of the state" held in Switzerland. This is not, however, the case. Firstly, Swiss banking secrecy was not introduced in 1934, but rather reinforced; secondly, Swiss ruling circles performed the 1934 reinforcement without humanitarian motives in mind.

src: www.libertylawsite.org

Electronic payments

Swiss banks, as well as the post office (which handles some financial transactions) use an electronic payments system known as Swiss Interbank Clearing (SIC). The system is supervised by the Swiss National Bank and is operated via a joint venture. SIC handled over 250 million transactions in 2005, with a turnover value of 41 trillion Swiss francs.

src: i.ytimg.com

Major banks

As of 2008, there are 327 authorized banks and securities dealers in Switzerland, ranging from the "Two Big Banks" down to small banks serving the needs of a single community or a few special clients.

UBS and Credit Suisse are respectively the largest and second largest Swiss banks and account for over 50% of all deposits in Switzerland; each has extensive branch networks throughout the country and most international centers.

Due to their size and complexity, UBS and Credit Suisse are subject to an extra degree of supervision from the Federal Banking Commission.

UBS

UBS came into existence in June 1998, when Union Bank of Switzerland, founded in 1862, and Swiss Bank Corporation, founded in 1872, merged. Headquartered in Zurich and Basel, it is Switzerland's largest bank. It maintains seven main offices around the world (four in the United States and one each in London, Tokyo, and Hong Kong) and branches on five continents.

Credit Suisse

Credit Suisse is the second-largest Swiss bank. Based in Zurich, it was founded in 1856; its market capitalization (as of 2007) is US$95.2 billion, and the company has about 40,000 employees. Credit Suisse Group offers private banking, investment banking and asset management services. It acquired The First Boston Corporation in 1988 and merged with the Winterthur insurance company in 1997; the latter was sold to AXA in 2006. The asset management services were sold to Aberdeen Asset Management in 2008 during the Financial crisis of 2007-2010.

src: www.zerohedge.com

Other banks

Central Bank

The Swiss National Bank (SNB) serves as the country's central bank. Founded by the Federal Act on the Swiss National Bank (16 January 1906), it began conducting business on 20 June 1907. Its shares are publicly traded, and are held by the cantons, cantonal banks, and individual investors; the federal government does not hold any shares. Although a central bank often has regulatory authority over the country's banking system, the SNB does not; regulation is solely the role of the Federal Banking Commission.

Private banks

The term private bank refers to a bank that offers private banking services and in its legal form is a partnership. The first private banks were created in St. Gallen in the mid-18th century and in Geneva in the late 18th century as partnerships, and some are still in the hands of the original families such as Hottinger and Mirabaud. In Switzerland, such private banks are called private bankers (a protected term) to distinguish them from the other private banks which are typically shared corporations. Historically in Switzerland a minimum of CHF1 million was required to open an account, however, over the last years many private banks have lowered their entry hurdles to CHF250,000 for private investors.

Cantonal banks

There are, as of 2006, 24 cantonal banks; these banks are state-guaranteed semi-governmental organizations controlled by one of Switzerland's 26 cantons that engage in all banking businesses. The largest cantonal bank, the Zurich Cantonal Bank, had a 2005 net income of CHF810 million.

Raiffeisen banks

Raiffeisen "assumes the role of central bank" in providing treasury services, and is the third largest group consisting of 328 banks in 2011, 390 in 2012 with 1,155 branches. During February 2012, P. Vincenz was chief executive. During January, an announcement was made that the non-U.S. businesses of Wegelin & Co, the oldest Swiss bank, would be bought by the Raiffeisen group. The group has 3 million plus clients within Switzerland.

Others

• Migros Bank
• Coop Bank
• Swiss Bank Corporation is a non-existent entity, used since 2017 as a catchy reference name by scammers who had in the past enticed people to send money to Nigeria or the likes, in order to receive their supposed "deposit", "inheritance" or such from their deceased great-uncle, or the United States Treasury or Lottery, or other benefactor. Due to international awareness of these scams, they have now changed the name of the supposed source of the funds to include the reputable word "Swiss".

src: i.ytimg.com

Banking privacy

The Banking Law of 1934 made it a criminal act for a Swiss bank to reveal the name of an account holder. Swiss bank secrecy protects the privacy of bank clients; the protections afforded under Swiss law are similar to confidentiality protections between doctors and patients or lawyers and their clients. The Swiss government views the right to privacy as a fundamental principle that should be protected by all democratic countries. While privacy is protected, in practice all bank accounts are linked to an identified individual. Moreover, the bank secrecy is not absolute: a prosecutor or judge may issue a "lifting order" in order to grant law enforcement access to information relevant to a criminal investigation.

On the 27th of May 2015, Switzerland signed an agreement with the EU that will align Swiss bank practices with those of EU countries, and in effect will end the special secrecy that EU-resident clients of Swiss banks had enjoyed in the past. Under the agreement, both Switzerland and EU countries will automatically exchange information on the financial accounts of each other's residents from 2018.

Taxation

Swiss law distinguishes between tax evasion (non-reporting of income) and tax fraud (active deception). International legal assistance used to be granted only with respect to tax fraud. Under pressure from the OECD and the G20, the Swiss government decided in March 2009 to abolish the distinction between tax evasion and tax fraud in dealings with foreign clients. Switzerland adheres to the international OECD standards with regard to administrative assistance in tax matters (decision to take over the OECD Model Tax Convention, in particular Article 26).

For Swiss taxpayers the distinction remains in place. Although not considered a crime and hence not prosecuted in a penal court, tax evasion is a serious offence under Swiss tax law and hefty financial penalties apply. In domestic prosecutions, banking secrecy may be lifted by court order in cases of tax fraud or particularly severe cases of tax evasion.

European Union

Pressure on Switzerland has been applied by several states and international organizations attempting to alter the Swiss privacy policy. The European Union, whose member countries geographically surround Switzerland, has complained about member states' nationals using Swiss banks to avoid taxation in their home countries. The EU has long sought a harmonized tax regime among its member states, although many Swiss banking officials (and, according to some polls, the public) are resisting any such changes.

However, Switzerland did not want to be seen as an obstacle to closer tax cooperation among EU-member states and decided to support the international efforts to adequately tax cross-border investment income. The retention tax agreed with the European Union (EU) in the taxation of savings income agreement is a suitable and efficient means of doing so. The EU is committed to eliminating existing loopholes in the system of taxation of savings income. Switzerland has expressed to the EU its willingness in principle to correspondingly adjust the taxation of savings income. Here it should be noted that Switzerland has adopted the OECD standard on administrative assistance and that the Federal Council rejects the automatic exchange of information. Since July 1, 2005, Switzerland has charged a withholding tax on all interest earned in the personal Swiss accounts of European Union residents.

Switzerland is not a member of the European Union but, since December 2008, is a part of the Schengen agreement.

United States

Swiss bank accounts cannot be opened without the holder signing a legal document asserting that they have no outstanding financial obligations to the IRS.

In January 2003, the United States Department of Treasury announced a new information-sharing agreement under the already extant U.S.-Swiss Income Tax Convention; the agreement was intended to facilitate more effective tax information exchange between the two countries. However, Swiss policy has continued to come under international criticism, and in March 2009 Switzerland agreed to renegotiate more effective tax cooperation with the United States and other countries.

In 2013, the Swiss Parliament approved a law that allows Swiss banks to cooperate with United States tax authorities as specified in the FATCA.

Numbered bank accounts

Some bank accounts are afforded an extra degree of privacy. Information concerning such accounts, known as numbered accounts, is restricted to senior bank officers, rather than being accessible to all the employees of a bank. However, the information required to open such an account is no different from that of an ordinary account; completely anonymous accounts are not allowed by law. Should a criminal investigation take place, law enforcement has access to information related to a numbered account in the same way it has access to information about any other account.

src: naradanews.com

Alleged connection to illegal activities

According to CBS News, Swiss banks in Geneva and Zurich have served as safe havens for the wealth of dictators, despots, mobsters, arms dealers, corrupt officials, and tax cheats.

Money laundering

There are several measures in place to counter money laundering. The Money Laundering Act sets forth requirements of account holders' identification, and requires reporting of any suspicious transactions to the Money Laundering Reporting Office.

According to the CIA World Factbook, Switzerland is "a major international financial center vulnerable to the layering and integration stages of money laundering; despite significant legislation and reporting requirements, secrecy rules persist and nonresidents are permitted to conduct business through offshore entities and various intermediaries..." However, Switzerland's cooperation in transnational financial issues has been praised by several major U.S. officials. A Federal Bureau of Investigation anti-terrorism official noted that Switzerland was one of several countries to participate in joint task forces targeting financing of Al-Qaeda terrorist cells; a former Assistant Secretary of the Treasury praised Swiss cooperation and the country's assistance in the finding and freezing of terrorist and Iraqi assets.

Bradley Birkenfeld whistleblowing case

Swiss bank secrecy was dealt a severe setback by the revelations made by ex-UBS banker Bradley Birkenfeld, who blew the whistle on UBS providing Americans with vehicles to hide up US$20 billion in assets to avoid taxes. Birkenfeld's revelations to the U.S. government concerning UBS's practices led to a massive fraud investigation against the Swiss bank UBS. In response, UBS announced that it would cease providing cross-border private banking services to US-domiciled clients through its non-US regulated units as of July 2008.

In November 2008, a U.S. federal grand jury indicted Birkenfeld's former boss, Raoul Weil, as the result of the investigation of UBS' U.S. cross-border business. Weil served as the chief executive officer of UBS's Global Wealth Management & Business Banking unit and was a member of UBS' Group Executive Board. UBS would eventually cut ties to Weil in May 2009 and he would continue to face charges after UBS had settled its criminal case with the U.S. government.

As a result of the information Birkenfeld gave U.S. authorities, the Department of Justice announced it had reached a deferred prosecution agreement (DPA) with UBS that resulted in a $780 million fine and the release of previously privileged information on American tax evaders. Weil, whose employment with UBS was terminated by UBS after he was indicted by the U.S. Justice Department, subsequently was hired as a consultant by the Swiss private bank Reuss Private Group in 2010, rising to become the firm's CEO in early 2013. He was arrested on an international warrant while visiting Italy in October 2013 and was extradited to the United States to face charges stemming from Birkenfeld's revelations.

On 11 September 2012, the U.S. IRS Whistleblower Office paid Birkenfeld a $104 million award for acting as a corporate whistleblower. The Swiss media credit Birkenfeld's act with affecting a sea change in Swiss banking. After Birkenfeld's award, the Swiss newspaper Blick claimed, "Birkenfeld was a blessing for the Swiss financial industry," in that his revelations helped accelerate the industry's transition away from its reliance on "dirty" money by dooming the bank secrecy laws that enabled tax evasion.

Birkenfeld has compared the Swiss banking industry with gangsters. "In essence, bank secrecy is analogous to criminal racketeering -- and the Swiss government, along with every Swiss private banker, is a co-conspirator."

Allegations of black money

Swiss Banks are alleged to stash black money (money not reported to the government for tax purposes); Editor-in-chief for WikiLeaks, Julian Assange, noted that, as per documents of bank accounts by a former banker and whistleblower Rudolf Elmer, the "names in the documents came from 'US, Britain, Germany, Austria and Asia' - from all over".

src: www.maeeshat.in

Swiss banks and World War II

Several inquiries have been made into the conduct of Swiss banks during the Nazi Germany period (1933-1945), especially regarding funds deposited by or allegedly stolen from victims of the Holocaust. The campaign causing the highest outlays (US$1.25 billion in 1999) on the part of the Swiss banking industry as of 2009 was the World Jewish Congress lawsuit against Swiss banks launched by Edgar Bronfman, president of the World Jewish Congress, in concert with US Senator Alfonse d'Amato of New York.

The audit run by the Volcker Commission which resulted from this lawsuit cost CHF300 million and gave its final report in December 1999. It determined that the 1999 book value of all dormant accounts possibly belonging to victims of Nazi persecution that were unclaimed, closed by the Nazis, or closed by unknown persons was CHF95 million. Of this total, CHF24 million were "probably" related to victims of Nazi persecution. In addition the commission found "no proof of systematic destruction of records of victim accounts, organized discrimination against the accounts of victims of Nazi persecution, or concerted efforts to divert the funds of victims of Nazi persecution to improper purposes." It also "confirmed evidence of questionable and deceitful actions by some individual banks in the handling of accounts of victims".

In response to the lawsuit, the Swiss government commissioned an independent panel of international scholars known as the Bergier Commission to study the relationship between Switzerland and the Nazi regime. It reached similar conclusions about the banks' conduct in its final report, and found that trade with Nazi Germany did not significantly prolong the war.

src: greenwatchbd.com

International competition

With recent changes in the Swiss bank secrecy regime the assets held by foreign persons in Swiss bank accounts declined according to data by the Swiss National Bank (SNB) by 28.1% between January 2008 and November 2009, increasing again in 2012 and hitting all-time high in 2014. Other states, such as Singapore and Hong Kong, have attracted depositors seeking privacy and protection. Having taken steps to make its banks more attractive, Singapore strengthened penalties for violators of bank secrecy (and now imposes steeper fines and longer jail sentences for offenders), and modified its laws on trusts and inheritance. Nevertheless, this new model is being currently challenged by the OECD. Singapore is also now the location of Credit Suisse's international banking headquarters. Despite these changes, however, Switzerland still ranks at the top of the Tax Justice Network's "Financial Secrecy Index" as of 2013.

src: c8.alamy.com

Notes and references

src: www.300hours.com

Bibliography

src: c8.alamy.com

See also

• Black money
• Offshore bank
• Societe Internationale v. Rogers
• Swiss Bankers Association
• Swiss franc
• Swiss Leaks
• World Jewish Congress lawsuit against Swiss Banks
• List of banks in Switzerland
• List of Swiss financial market legislation
• Economy of Switzerland

src: static5.uk.businessinsider.com

External links

• The Swiss banking law, as amended, from KPMG
• Offshore Banking, Directory resource, from OTH
• The Swiss Financial Center, from swissworld.org
• swissbanking.org
• Swiss Private Banking News
• "Échange automatique, secret bancaire : la réponse de l'ASB" (audio). A l'écoute : "Forum" (in French). Radio suisse romande. 25 January 2013. Retrieved 27 January 2013.  Regarding World Economic Forum#Davos Man, January 2013, interview of Patrick Odier, President of the Swiss Bankers Association, Association suisse des banquiers (ABS).

Source of the article : Wikipedia