BANK

A bank is a financial institution licensed to receive deposits and make loans. Banks may also
provide financial services, such as wealth management, currency exchange and safe deposit
boxes.
ETYMOLOGY
• Bank financial institution," late 15c., originally "money-dealer's counter or shop," from either
Old Italian banca or Middle French banque (itself from the Italian word), both meaning "table," or
“bench”.
• From a Germanic source bankiz-"shelf," bankon-"natural earthen incline bordering a body of
water.”
HISTORY OF BANKING
GLOBAL
• Safe in the temple: 18th century BC
In early civilizations a temple is considered the safest refuge; it is a solid building, constantly
attended, with a sacred character which itself may deter thieves. In Egypt and Mesopotamia
gold is deposited in temples for safe-keeping.
• Greek and Roman financiers: from the 4th century BC
Money lenders can be found who will accept payment in one Greek city and arrange for credit in
another, avoiding the need for the customer to transport or transfer large numbers of coins.
Rome, with its genius for administration, adopts and regularizes the banking practices of
Greece.
• Religion and banking: 12th - 13th century
The Christian prohibition on usury eventually provides an opportunity for bankers of another
religion.
• Bankers to Europe's kings: 13th - 14th century
a) During the 13th century bankers from North Italy, collectively known as Lombards, gradually
replace the Jews in their traditional role as money-lenders to the rich and powerful.
b) Double-Entry Book-Keeping
c) Christian sin of usury
• The Fugger dynasty: 15th - 16th century
a) Fugger is a German family that was historically a prominent group of European bankers,
members of the fifteenth- and sixteenth-century mercantile patriciate of Augsburg, international
mercantile bankers, and venture capitalists.
b) Controlled much of the European economy in the sixteenth century and accumulated
enormous wealth. The Fuggers held a near monopoly on the European copper market.
• Banks and cheques: from the 16th century
a) In 1587 the Banco della Piazza di Rialto is opened in Venice as a state initiative. Its purpose
is to carry out the important function of holding merchants' funds on safe deposit, and enabling
financial transactions in Venice and elsewhere to be made without the physical transfer of coins.
b) This was an accepted part of trade in ancient Greece, but it has previously been carried out
by individual moneylenders - involving a high risk of bankruptcy.
National banks: 17th - 18th century
a) Paper currency makes its first appearance in Europe in the 17th century.
b) In 1617 the Banco Giro is established to solve problems encountered by the earlier Banco
della Piazza di Rialto, which has got into trouble through the making of unsecured loans.
c) Other Mediterranean trading centres (in particular Barcelona and Genoa) have possibly taken
this step before Venice, and it is soon followed in northern cities - Amsterdam in 1609, Hamburg
in 1619, Nuremberg in 1621.
d) The transformation from moneylenders into private banks is a gradual one during the 17th
and 18th centuries. In England it is achieved by various families of goldsmiths who early in the
period accept money on deposit purely for safe-keeping.
e) 18th century, they make banking their business in place of their original craft as goldsmiths.
f) The logical extension of this concept is a national bank, established in some form of
partnership with the state.
g) The earliest example is the Bank of Sweden, founded in 1668 and today the world's oldest
surviving bank.
h) It is followed before the end of the century by the Bank of England, originally a joint-stock
company which begins its existence in 1694 by arranging a loan of £1,200,000 to the
government.
Bank notes: 1661-1821
a) In 1656 Johan Palmstruch establishes the Stockholm Banco. It is a private bank but it has
strong links with the state (half its profits are payable to the royal exchequer).
b) In 1661, in consultation with the government, Palmstruch issues credit notes which can be
exchanged, on presentation to his bank, for a stated number of silver coins.
c) Palmstruch's notes (the earliest to survive dates from a 1666 issue) are impressive-looking
pieces of printed paper with eight hand-written signatures on each. If enough people trust them,
these notes are genuine currency; they can be used to purchase goods in the market place if
each holder of a note remains confident that he can indeed exchange it for conventional coins at
the bank.
d) The next bank notes are issued in Europe,John Law, founder of the Banque Générale in
Paris in 1716
e) With governments issuing the bank notes, the inherent danger is no longer bankruptcy but
inflation.
The Rothschild dynasty: 1801-1815
a) William IX, ruler of the German state of Hesse-Kappel and possessor of a vast fortune, has
for some years consulted in a private capacity his friend Mayer Amschel Rothschild, a Jewish
banker and merchant of Frankfurt. He values Rothschild's advice both on matters of finance and
on additions to his art collection.
b) Rothschild responds energetically to this opportunity. By 1803 he is in a position to lend 20
million francs to the Danish government.
1820
• In the early years of the 19th century England suffered a succession of financial crises, the
most devastating of which, in 1825, ruined 60 banks. In an effort to increase stability, the
government changed the law to permit the formation of so-called ‘joint stock banks’; larger
shareholder-owned banks like those that already existed in Scotland.
• Mid-19th century was George Carr Glyn, of RBS constituent Glyn, Mills & Co. Thanks to his
enthusiasm for railways, his bank was involved in financing dozens of key railway building
schemes, not only in the UK, but all around the world. In consequence, Glyn, Mills became
popularly known as ‘the Railway Bank’.
"Free Banking" Era: 1837-1863
• Free banking is a monetary arrangement where banks are free to issue their own paper
currency (banknotes) while also subject to no special regulations beyond those applicable to
most enterprises.
• Bank notes were issued against little or no security, and credit was overexpanded;
depressions brought waves of bank failures.
Banks began to take deposits: 1857
• In 1857, it began to take in deposits.
Postal savings system: 1861
• To provide depositors who did not have access to banks a safe, convenient method to save
money and to promote saving among the poor, the postal savings system was introduced in
Great Britain in 1861.
First investment banking firm. 1861
• On January 1, 1861, the wealthy banker Jay Cooke launches the first investment banking firm
in the U.S. Borrowing three million dollars from the Pennsylvania government, he sets up Jay
Cooke & Company, which helps finance Northern efforts during the Civil War. The company
negotiates loans for the government and sells government bonds.
NATIONAL BANK ACT OF 1863
• The National Bank Act of 1863 was designed to create a national banking system, float federal
war loans, and establish a national currency. Congress passed the act to help resolve the
financial crisis that emerged during the early days of the American Civil War (1861–1865).

Banks could not function because of Reading Railroad: 1893

• This panic began with the collapse of the Reading Railroad. Many banks relied heavily on it
and other railroads, and without them, the banks could not function.
1900
•​Checks become a more common means of payment.
•​Ownership of capital stock increases as common people become more affluent, have surplus
capital, and have access to the stock market.
•​The Gold Standard Act of 1900-
•​This act stabilizes the economy, establishes gold as the only standard for redeeming paper
money, and prohibits the exchange of silver for gold.
The Federal Reserve Act sets up a new system of federal banks. 1913
• Under President Woodrow Wilson, who hopes to restore the national economy, Congress
passes the Federal Reserve Act in 1913. The Act sets up a new system of federal banks, the
first since the BUS closed in 1836. The Act also gives the government the power to raise or
lower interest rates and control the money supply.
Bank sold liberty bonds: 1917
• These Liberty bonds were used to finance World War I. This was a useful tactic that would be
used for decades to come.
McFadden Act, first chartered bank: 1927
• Which allowed banks to open limited service bank branches across state lines by merging with
other banks.
National Bank Holiday: 1933
• FDR enacted this bank holiday to try to ease some of the panic during the Great Depression.
While banks were closed for these 4 days (and it actually extended to the 13th), they were not
allowed to give or receive any money. This gave the president time to think about what his next
step would be. The holiday worked, and has reoccured throughout history during time of crisis.
The Glass-Steagall Act separates commercial and investment banking. 1933
• Roosevelt introduces further legislation with the Banking Act of June 16, 1933, also known as
the Glass-Steagall Act, which separates commercial banking from investment banking. It also
introduces federal deposit insurance and regulation of interest rates on deposits.
Banking Act of 1935
• This act shifted power from regional Federal Reserve banks to a board in Washington D.C. It
also made banks insure the deposits that were put into them. This is very important for customer
confidence in the bank system.
The first bank card: 1946
• The first version of a credit card was issued by oil companies and department stores. They
were used to create customer loyalty and improve customer services. The first bank card was
introduced in 1946 by a New York bank called Biggins’ Bank. The bank would reimburse the
merchant and then obtain payment from the customer. General purpose credit cards were born
in 1966 when credit-issuing banks joined together to create interbank associations, MasterCard
and Visa.
Automated teller machines: 1969
On September 2, 1969, Chemical Bank installed the first ATM in the U.S. at its branch in
Rockville Centre, New York. The first ATMs were designed to dispense a fixed amount of cash
when a user inserted a specially coded card.
Electronic cash counters: 1980
Such counters were first introduced in Great Britain in 1980 and made bank tellers’ jobs easier.
Today, some banks maintain self-serve coin counters in their lobbies so customers can see just
how much money that shoebox on their dresser contains.
The 1986 'Big Bang' in London
• allowing banks to access capital markets in new ways, which led to significant changes to the
way banks operated and accessed capital. It also started a trend where retail banks started to
acquire investment banks and stock brokers creating universal banks that offered a wide range
of banking services.
Tablet computers: 1989
• Released by GRiD Systems in 1989 and manufactured by Samsung, GRiDPad was
considered the first commercially successful tablet computer. Zengel points out that tablets have
transformed retail banking by allowing bank employees to move within and even beyond the
branch. “Instead of waiting in a line for the teller to become available, the teller might come to
the door, greet a customer, sit on the couch with them and serve their needs from a mobile
tablet as opposed to a tethered device,” he says. In the good old days, bankers took notes from
customers on cocktail napkins, but now they can take the bank to customers, whether that’s on
a sofa in a branch or at the customer’s business.

PayPal: 1998
• Established as Confinity in 1998, PayPal earned praise as a user-friendly money transfer
service. On the heels of PayPal came other person-to-person (p2p) payment innovations like
Venmo, Popmoney and Zelle. Greg Bloh, CEO of TransCard in Chattanooga, Tenn., describes
the arrival of PayPal as a watershed event.
Digital check clearing : 2004
• With the Check Clearing for the 21st Century (Check 21) Act of 2004, a check recipient could
make a digital copy of a check and then process that check electronically. Jack Henry’s Zengel
points out that check imaging “eliminated a lot of paper and put a lot of couriers out of business.
Mobile Payment: 2007
• Steve Jobs unveiled the iPhone at the Macworld convention on Jan. 9, 2007, and the first
iPhone was released to the public five-and-a-half months later. Apple Inc. would eventually
move into mobile payments: On Sept. 9, 2014, Apple Pay was launched, allowing payments to
be accepted at the point of sale from stored and encrypted payment card information on mobile
devices.
Bitcoin: 2009
• The convergence of digital currency bitcoin, the explosion of social media and the global
financial crisis of 2007-2009 spurred people to question norms, according to Travis D. Dulaney,
CEO of Push Payments in Fort Lauderdale, Fla.
Mobile point-of-sale devices: 2010
• These devices, which can be plugged into mobile phones or iPads, allowed very small
companies, from fruit growers at farmers’ markets to craftspeople at trade shows, to begin
accepting noncash payments. What’s more, mobile point-of-sale devices were integrated with
cloud-based systems and could help merchants in innumerable ways—from tracking inventory
to gathering business intelligence.
Facial recognition technology : 2011
• The Panamanian government first installed face recognition systems in 2011 to reduce illicit
activity in Tocumen International Airport. Stephen Joseph, business development manager,
banking and finance, for market leader in network video Axis Communications, Inc., notes that
video analytics are becoming a focus for banks seeking to enhance security.

The 2015 EMV chip shift: 2015

• FiNet’s Brent says EMV chips make cards far more secure because the information
transmitted is encrypted and tokenized. Additional security is critical as payments become more
integrated, he notes.
Web-based compliance dashboards: 2016
• Early this fall, Affirmative Technologies went live with its first banking customer for ACH
Insight, a dashboard that lets bankers use graphs and other features to manage and monitor
risk, perform compliance reporting and identify anomalies and suspicious patterns
User-friendly onboarding apps: 2018
• A banking app that you can download that could onboard quickly (in three minutes, not 30) and
a core powerful enough to handle multiple banking products from a single dashboard.
The history of money: from barter to bitcoin
A World Without Money
Money, in some form, has been part of human history for at least the last 3,000 years. Before
that time, it is assumed that a system of bartering was likely used.
Bartering is a direct trade of goods and services - I'll give you a stone axe if you help me kill a
mammoth - but such arrangements take time. You have to find someone who thinks an axe is a
fair trade for having to face the 12-foot tusks on a beast that doesn't take kindly to being hunted.
If that didn't work, you would have to alter the deal until someone agreed to the terms.
Asian Cutlery
Sometime around 1,100 B.C., the Chinese moved from using actual tools and weapons as a
medium of exchange to using miniature replicas of the same tools cast in bronze.
Coins and Currency
In 600 B.C., Lydia's King Alyattes minted the first official currency. The coins were made from
electrum, a mixture of silver and gold that occurs naturally, and stamped with pictures that acted
as denominations.
Not Just a Piece of Paper
Just when it looked like Lydia was taking the lead in currency developments, in 600 B.C., the
Chinese moved from coins to paper money. By the time Marco Polo visited in 1,200 A.D., the
emperor had a good handle on both money supply and various denominations. In the place of
where the American bills say, "In God We Trust," the Chinese inscription warned, "All
counterfeiters will be decapitated."
Europeans were still using coins all the way up to 1,600, helped along by acquisitions of
precious metals from colonies to keep minting more and more cash. Eventually, the banks
started using bank notes for depositors and borrowers to carry around instead of coins. These
notes could be taken to the bank at any time and exchanged for their face values in silver or
gold coins. This paper money could be used to buy goods and operated much like currency
today, but it was issued by banks and private institutions, not the government, which is now
responsible for issuing currency in most countries.
Money Travels
The shift to paper money in Europe increased the amount of international trade that could occur.
Banks and the ruling classes started buying currencies from other nations and created the first
currency market.
Mobile Payments
The 21st century gave rise to two disruptive forms of currency: Mobile payments and virtual
currency. A mobile payment is money rendered for a product or service through a portable
electronic device such as a cell phone, smartphone or PDA
Virtual Currency
Bitcoin, invented in 2009 by the pseudonymous Satoshi Nakamoto, became the gold
standard--so to speak--for virtual currencies. Virtual currencies have no physical coinage. The
appeal of virtual currency is it offers the promise of lower transaction fees than traditional online
payment mechanisms and is operated by a decentralized authority, unlike government issued
currencies.
INNOVATION
Pneumatic capsule transportation (1836)
Pneumatic capsules were first used for transmitting telegrams, but when the automobile age
dawned, American banks embraced the invention so customers could withdraw money and
make deposits without leaving their cars. Arguably, drive-up teller windows were the beginning
of a shift in branch design that accelerated after the arrival of cash automation technologies,
says Anthony Burnett, customer experience director for Level5, a custom design-build and
construction company for banks and credit unions.
The credit card (1950)
In 1950, Diners Club introduced the first universal credit card, a portable payment solution that
could be used at numerous member establishments.
Candy bars and cash: the first ATMs (1960s)
. If vending machines could dispense chocolate bars, why couldn’t they dispense cash?
Barclays Bank in London loved the idea, and Shepherd-Barron’s first ATM was installed in a
Barclays branch not long afterward. There were no plastic cards: the first ATM used paper
vouchers printed with machine-readable radioactive ink.
Abacus to FABACUS: the move to computers (1960s - 1980s)
The computer centralised the bank’s trading accounts by replacing the machine accounting
operations used in each individual branch. The GE225, or FABACUS (First Australian Bank’s
Accounting Computer Used in Sydney), was the size of three wardrobes and had 20 kilobytes of
core memory. The rationale for the purchase was to make processes more efficient in order to
re-focus on customer service.
The digital tide proved unstoppable. Banks started to invest heavily in computer technology to
automate manual processing. By the 1970s, the first electronic payment systems for both
international and domestic transactions were developed.
Online banking from home.(1980s - 2000s)
The term 'online' became popular in the late 1980s and referred to the use of a terminal,
keyboard and TV (or monitor) to access the banking system using a phone line. Online banking
was first introduced in New York in 1983 and arrived almost simultaneously in the UK. Benefits
for banks included:
•​Diminished transaction costs
•​Easier integration and bundling of services
•​Interactive marketing capabilities
Mobile banking (2000 - 2017)
The advent of wireless technology and the smartphone heralded the era of mobile banking.
Mobile banking, via apps and browsers, is available on a 24-hour basis. For the first time,
customers could obtain account balances, pay bills, transfer funds transfer and buy financial
products from a device in their pocket. Mobile banking further reduced the cost of handling
transactions. It also had particular appeal to millennials. who want mobile, on-demand banking
with personalised, 24/7 service. Research shows most millennials would rather do banking on a
mobile device than in person.
Banking in an era of disruptive technology (2017)
For banks, it will be essential to use data analytics to deliver highly personalised customer
experiences. These will be at multiple interaction-points such as:
•​Bank branches
•​ATMs
•​Mobile banking applications
They will take place via multiple channels including texting, the bank website, chatbots and the
phone. For decades, the main game in using digital technology in banking has been process
efficiency. This was usually better for the banks than for the consumer. Early adoption of
disruptive technology will help banks seamlessly manage the change to data-driven
personalised customer service and stay relevant and efficient in this exciting era.
LOCAL
History of Banking in the Philippines
Early history of BPI
• Established on August 1, 1851 under Spanish colonial rule, BPI was originally known as El
Banco Español Filipino de Isabel II, named after then Queen of Spain, Isabel II.
• The bank was the first to be established in the Philippines, and was responsible for starting the
country's banking and finance industry. Playing a unique role in the early economic history of
the Philippines, the bank performed many functions that in effect made it the country's Central
• Following the Spanish-American War of 1898, the Bank was reorganized and essentially
privatized under the U.S. federal government's National Bank Acts of 1863 and 1864. The bank
adopted its current name on January 1, 1912.
• 2016 BPI Introduces ATM Withdrawal Notifications
1. Bank of the Philippine Islands (BPI) beefs up its security against ATM skimmers by
introducing an optional ATM Withdrawal notification system. It's quite simple, when user
activates this feature, he will receive a notification whenever withdrawals were made from his
account using an ATM.
• 2017 BPI Pamana Padala Account
1. BPI Pamana Padala is a savings account that is specially designed for Overseas Filipino
Remitters. Once you receive your monthly salary from your company or employer abroad, you
can then remit it to your family.
Early history of HSBC
• HSBC's history in the Philippines dates back more than 110 years with the establishment of
their first branch no. 90 Rosario Street (Now Quintin Paredes Street) in Binondo, Manila in
1896.
Early history of Citi Bank
• Citi's history in the Philippines dates back to July 1902 when the International Banking
Corporation, forerunner of Citibank, first established a branch in Manila.
Early history of PNB
• The Philippine National Bank was established as a government-owned banking institution on
July 22, 1916 with headquarters in the old Masonic Temple along Escolta, Manila. Its primary
mandate was to provide financial services to Philippine industry and agriculture and support the
government’s economic development effort. World War I, then raging in Europe, generated
huge demand for the country’s major exports namely: sugar, copra, coconut oil, Manila hemp
and tobacco. However, not much was being done to develop the industries that produced these
sought-after crops since access to credit facilities was limited then. To solve this problem,
Henderson Martin, Vice Governor of the Philippines, together with Mr. Miguel Cuaderno (who
later became Central Bank governor) drafted the charter for a national bank.
• In 1980, PNB became the first universal bank in the country. However, it encountered
operational difficulties in the mid-80s as a result of the economic downturn triggered by the
assassination of Senator Benigno S. Aquino, Jr and had to be assisted by the government in
1986.
• 2015 PNB ATMSafe Can Help Bank Depositors Deal with ATM Theft
1. Philippine National Bank (PNB) already has the solution to this mounting ATM theft problem.
The PNB ATMSafe is the first innovative insurance product in the Philippines that secures and
protects ATM cardholders and their accounts. For only Php 12.00 per month, ATMSafe replaces
money stolen from a cardholder’s account as a result of skimming or any of the other forms of
ATM theft scams. ATMSafe also ensures the safety of PNB ATM cardholders as it restores
money stolen during an ATM robbery – up to Php 50,000 for a maximum of three (3) incidents
per year. Other benefits of the program include: accidental death of Php 112,500; hospital
confinement benefit of Php 2,250 per day, maximum of thirty (30) days; replacement of lost
cash incurred from machine tampering of Php 50,000; trauma and emergency assistance;
document replacement benefit; quick processing of claims; identity theft restoration; and 24/7
coverage anywhere in the world.
• 2018 PNB Savings opens first fully-digital branch
1. PNB Savings Bank said it opened its first fully digital branch in San Juan City with no tellers
and largely paperless transactions.The new branch is equipped with interactive touchscreens,
self-service kiosks, tablets, chatbots and full-function automated teller machines, among others.
In place of bank tellers, “universal officers” are on-site to assist clients in getting used to the new
technology, open accounts and recommend financial products.
Early history of China Bank
• China Bank was founded by Dee C. Chuan, a leading business leader and philanthropist, Don
Albino Sycip, known as the Dean of Philippine Banking, and ten other prominent businessmen
of the era. The Bank opened for business on August 16, 1920 on Calle Rosario—what is now
No. 90 Quintin Paredes St., Binondo. With a modern Chinese organization structure, and guided
with an in-depth understanding of the way Chinese merchants do business—like operating on
the principle of xinyong or trustworthiness—China Bank steadily grew and flourished.

• 2018 Beep card reload now possible in select China Bank ATMs
1. China Bank is AFPIs first bank partner to feature a reloading service through its ATMs. The
new service diversifies the ways commuters can reload their beep cards and helps reduce
queues in train stations.
Early history of Development Bank of the Philippines
DBP's history can be traced back during the Commonwealth when the early infrastructure for
development financing was laid by the government.
• 1935 - The National Loan and Investment Board (NLIB) was created to coordinate and
manage government trust funds such as the Postal Savings Fund and the Teacher's Retirement
Fund.
• 1939 - The Agricultural and Industrial Bank (AIB), which absorbed the functions of the NLIB,
was created and started to harness government resources until the outbreak of war.
• 1947 - The government created the Rehabilitation Finance Corporation (RFC) under R.A. No.
85 which absorbed the assets and took over the functions of the AIB. The RFC provided credit
facilities for the development of agriculture, commerce and industry and the reconstruction of
properties damaged by the war.
• 1958 - The RFC was reorganized into the Development Bank of the Philippines. The change in
corporate name marked the shift from rehabilitation to broader activities.
• 1986 - Former President Corazon Aquino issued E.O. No. 81 which provided for the 1986
Revised Charter that called for a clean up of DBP's books, staff reorganization and infusion of
initial operating budget. The rehabilitation program restored its financial viability and DBP
resumed lending operations.
• With the transfer of non-performing assets together with liabilities in June 30, 1986 to the
National Government, the DBP implemented an institutional strengthening program covering a
thorough revision of the credit process and a training program for the intensive implementation
of new lending thrusts. The Bank likewise reopened its lending windows for housing, agriculture,
and small and medium scale industries.
• 1998 - Former President Fidel V. Ramos signed R.A. 8523 amending DBP's 1986 Charter.
Among the major provisions incorporated in the new DBP Charter were the increase of
authorized capital stock from P5 billion to P35 billion, and the creation of the position of
President and CEO.
Early history of Philippine Bank of Communications
• The Philippine Bank of Communications, more commonly known as PBCOM, is one of the
largest commercial banks in the Philippines. It was founded in 1939. The bank's headquarters,
PBCom Tower, located in Makati, is the second-tallest building in the Philippines.
• PBCOM started as the Philippine branch of the Chinese Bank of Communications, which
became one of the first non-American foreign commercial banks to operate in the Philippines
(foreign because it was under Chinese control at the time) with the granting of its banking
license on August 15, 1939. It was incorporated and registered with the Securities and
Exchange Commission on August 23 and started operations on September 4. The bank started
operations at the ground floor of the Trade and Commerce Building on Juan Luna Street in
Binondo, Manila, with a staff of twenty men, all below the age of thirty and many fresh out of
school.
Early history of Security Bank
• Established on June 18, 1951, Security Bank, known then as the Security Bank and Trust
Company, was the first private and Filipino-controlled Bank of the post-World War II period.
Through the years, the bank experienced steady growth and success through our consistent
and unflinching commitment to serve clients and stakeholders with milestones such as:
•​The late 50s marked Security Bank’s branch expansion in various parts of Manila. First among
our banking peers, the bank had more branches in the metropolis than any other bank in the
country.
•​The 60s was marked by the opening of the bank’s first provincial branch in Angeles, Pampanga
as a part of the bank’s goal of a broader, countrywide reach. Throughout the decade, branches
were established in various parts of the Visayas and Mindanao.
•​In the 70s, Security Bank laid the foundation for a culture of innovation in product development
with the introduction of Diners Club, the first credit card franchise in the Philippines. The Bank
also introduced to the market innovative trust products and services that served as forerunners
of today’s pre-need and common-trust plans.
•​In 1991, new majority owners led by Frederick Y. Dy assumed control of Security Bank and
Trust Company, infusing a fresh direction for the Bank.
•​In 1994, the bank was granted a Universal Bank license and not much later in 1995, Security
Bank was publicly listed on the Philippine Stock Exchange (PSE: SECB) in 1995 for an
impressive initial public offering of Php 1.5B.
•​On June 18, 2001, SBC celebrated 50 years of banking in the Philippines, as it continued to
live a tradition of banking excellence..
Early history of Philippine Veterans Bank
• The concept of a bank for veterans of World War II was conceived in 1956, when a war
reparations agreement was signed between Japan and the Philippines. The agreement
provided for twenty million dollars in cash, five million pesos in capital and ten million dollars in
services. Under Republic Act No. 1789, better known as the Reparations Act, the cash
reparations were set aside into a special trust fund for the use of World War II veterans and their
families.
Early history of Rizal Commercial Banking Corporation (RCBC)
• The RCBC was established in 1960 as a development bank and is licensed by the Bangko
Sentral ng Pilipinas (BSP) for both commercial and investment banking. It is one of the largest
universal banks in the Philippines with total consolidated resources of Php554 billion for full year
2017. As a diversified financial services institution, RCBC serves corporate and individual
banking needs through the most appropriate vehicles to serve its chosen markets with
innovative products and services. With an inclusive financial business model in mind, in 2009 it
ventured into the microfinance business to service the smallest entrepreneurs via the Rizal
Microbank.
• RCBC is majority-owned by the Yuchengco Group of Companies (YGC)
Early history of Bank of Commerce
• The bank was founded by Emerito Ramos as the Overseas Bank of Manila and was
incorporated in December 1963. By 1968, the bank came under the control of the Central Bank
of the Philippines. In 1979, the Herdis group acquired the bank and reopened it as the
Commercial Bank of Manila in 1980. The Government Service Insurance System (GSIS)
acquired the bank from the Herdis group in 1982.
Early History of Metrobank
• Metropolitan Bank and Trust Company (Metrobank) was established by a group of
businessmen on September 5, 1962, at the Wellington Building in Binondo, Manila. In August
1963, the bank's first branch was established in Divisoria.
• In 1990, alongside Chinabank, Citibank, RCBC and Security Bank, Metrobank become a
founding member of BancNet.
Early history of UCPB
• UCPB started on May 15, 1963, as First United Bank (Philippines). With only four branches at
the time, it was a small commercial bank.
• UCPB's origin can be found in Presidential Decree 775 (or P.D. 775) where President
Ferdinand Marcos in July 29, 1975, instructed the Philippine Coconut Authority (PCA) to
"formulate and recommend for adoption credit policies affecting production, marketing and
processing of coconut and other palm oils" and "to provide readily available credit facilities to the
coconut farmers at preferential rates." The PCA, headed by Juan Ponce Enrile, then purchased
the 72.2 percent of First United Bank owned by Jose Cojuangco.
• Cocobank was the official short bank name in the 1980s and the early 1990s.
Early History of Landbank
• Land Bank of the Philippines established on August 8, 1963 (Filipino: Bangko sa Lupa ng
Pilipinas, Spanish: Banco Hipotecario de Filipinas), stylized as LANDBANK or also known by its
initials, LBP, is a universal bank in the Philippines owned by the Philippine government with a
special focus on serving the needs of farmers and fishermen. While it provides the services of a
universal bank, it is officially classified as a "specialized government bank" with a universal
banking license.
• LANDBANK is the fourth largest bank in the Philippines in terms of assets and is the largest
government-owned bank. It is also one of the biggest government owned and controlled
corporations in the Philippines.
Early history of BDO
• Banco de Oro (BDO), legally known as BDO Unibank, Inc., is a Philippine banking company
based in Makati. In terms of total assets, the firm is the largest bank in the Philippines, fifteenth
largest in Southeast Asia, 116th largest in Asia, and the 234th largest bank globally as of March
31, 2016. BDO Unibank is also a member of SM Group owned by Henry Sy. It is also the largest
bank in the country by market capitalization.
• BDO Unibank was established on January 2, 1968, as Acme Savings Bank, a thrift bank with
just two branches in Metro Manila. In November 1976, Acme was acquired by the Sy Group, the
group of companies currently owned by retail magnate Henry Sy, and renamed Banco de Oro
Savings and Mortgage Bank.
Early history of Union Bank.
• UnionBank is a partnership among the Aboitiz Group, Insular Life and Social Security System.
It started operations in 1981 and became a commercial bank by January 19, 1982. In July 1992,
UnionBank was granted the license to operate as a universal bank. The bank acquired the
International Corporate Bank (Interbank) in 1994.
Early history of EastWest Bank
• EastWest Bank was created on July 6, 1994. It was on that date that the Bangko Sentral ng
Pilipinas granted EastWest Bank its commercial banking license. Backed-up by the Filinvest
Group of Companies, EastWest Bank opened to the public along Senator Gil Puyat Avenue,
Makati on August 1, 1994. This was the comeback of the Gotianun's in the banking space after
they sold the Insular Bank of Asia and America to PCIBank in 1986 (which was acquired by
Equitable Bank forming Equitable PCI Bank which in turn was acquired by Banco De Oro in
2006) and Family Savings Bank to BPI (which was renamed BPI Family Savings Bank).
Early history of AUB
• Asia United Bank Corporation (AUB) is among the very few banks that was granted a
full-branch commercial bank license in 1997 and is operating until this day. In 2013, AUB joined
the league of Philippine Banks that have become publicly listed and acquired universal banking
status.
Early history of Robinsons Bank Corporation
• Robinsons Bank Corporation is a commercial bank which provides banking services for retail
and business customers in the Philippines.
• The company was formerly known as Robinsons Savings Bank and changed its name to
Robinsons Bank Corporation in May 2011. Robinsons Bank Corporation was founded in 1997
and is based in Quezon City with branches across the Philippines.
Early history of Maybank
• Malayan Banking Berhad (Maybank) reaches the Philippines on 2000. It acquires 60% equity
stake in PNB Republic Bank, renames the bank MAYBANK PHILIPPINES, INC. (MPI) and takes
over its management.
QUALITY CONTROL PROCESS
https://www.youtube.com/watch?v=aJJoV0xSDqA
https://www.youtube.com/watch?v=cYWHqha2wfk
DIFFERENT TYPES OF BANKS
Commercial Banks
Commercial banks are the banks that accept money in the form of deposits from the public and
give loans and advances to its customers by charging interest. They mobilize small savings and
promote the growth of trade and commerce. Generally, commercial banks lend money for a
short period only. They only provide working capital to the organizations. But in recent times
commercial banks are providing long-term capital also to the organizations.
There are several types of deposits which are accepted by the commercial banks like
⦿ Savings Deposits
⦿ Current Deposits
⦿ Fixed Deposits
⦿ Seasonal Deposits
⦿ Recurring Deposits, etc
The Commercial banks give different types of loans and advances to the businessmen like
⦿ Cash Credits
⦿ Overdrafts
⦿ Loans
⦿ Discounting Bills
Co-operative Banks
Co-operative Banks are the banks that usually provide short term, medium term, long term
credit to agricultural purposes. Co-operative Banks also provides loans to small-scale artisans.
Co-operative Banks usually provide credit facilities to farmers, small-scale industries, etc at a
cheaper rate of interest. Co-operative Banks are mainly situated in rural areas and can also be
seen in urban areas.
Central Bank
Every country has its own Central Bank. The Central bank aims at non-profit functioning. It
regulates the monetary and credit system of the country. Central Bank acts as controller,
supervisor, and regulator of the activities of commercial banks and other financial institutions in
the country. The Central bank is considered as the apex institution of the country’s money
market.
Industrial Banks
Industrial banks are also called as Investment Banks. Industrial banks provide long-term loans
to the industries. Industries require long-term capital for buying machinery, construction of
buildings, expansion of operations, etc. These capital required by industries is provided by
industrial banks for industrialists to grow their businesses. Industrial banks accept long-term
deposits from the public. They secure capital by issuing shares and debentures.
Agricultural Banks
Agricultural Banks are the banks which provide agricultural credit to the farmers. The
Agricultural Development Banks provide medium term and long term credit. Some examples of
Agricultural Banks in India are Agricultural Finance Corporation, Agricultural Refinance and
Development Corporation, National Bank for Agricultural and Rural Development
(NABARD).Agricultural Banks are established by the government to promote agricultural credit
in the country.
Savings Bank
Savings Banks mainly concentrates on the mobilization of savings of the people. In India Post
offices run by Postal department act as savings banks. Since Commercial banks are providing
these facilities of savings banks to the public, the need for separate savings bank is fading.
Foreign Exchange Banks
Foreign Exchange Banks are the banks which provide finance for foreign trade.These banks
accept deposits from the public. Foreign Exchange Banks are specialized banks in providing
credit for the foreign trade. These banks usually have their branches in foreign countries for
uninterrupted functioning of their services.But in recent times commercial banks are also
financing foreign trade.
Exchange Banks
Exchange Banks are the banks which operate by financing the imports and exports of the
country. These banks are mainly concerned with providing foreign exchange to their customers
and help to promote international trade. They also offer to discount of foreign bills of exchange
to their customers.
Private Bankers
Private Bankers are the individuals who do banking business individually or as a partnership. It
is purely an unorganized sector.Most of the private bankers do not receive or accept any
deposits from the public, they do banking business with their own capital. They lend money to
the people for high-interest rates.
Chit Funds
There are chit funds in India. They provide finance to trade and commerce. However, they
cannot be called as banks in the regular sense. The Chit fund business is very large in a country
like India. it is also an unorganized sector in India.
BENEFIT AND BAD EFFECTS
BENEFITS
Control your spending
Your bank account is the perfect audit trail as all money that goes into your account and comes
out of it, is recorded and kept for the lifetime of your account. This record makes it easy to track
your income and payments. Your bank account statements can also be used to help track and
manage your monthly budget.
Convenience
Direct banks are open for business anywhere there is an internet connection. Other than times
when technical maintenance is being done, they are open 24 hours a day, 365 days a year. If
internet service is not available, customer service is normally provided around the clock via
telephone. Real-time account balances and information are available at the touch of a few
buttons
Services
Direct banks typically have more robust online services that offer a comprehensive set of
features that may not be found on the websites of traditional banks. These include functional
budgeting and forecasting tools, financial planning capabilities, investment analysis tools, loan
calculators and equity trading platforms. They also offer free online bill paying, online tax forms
and tax preparation.
Mobility
Online banking now includes mobile capabilities. New applications are continually being created
to expand and improve this capability on smartphones and other mobile devices.
Transfers
Accounts can be automatically funded from a traditional bank account via electronic transfer.
Most direct banks offer unlimited transfers at no cost, including those destined for outside
financial institutions. They will also accept direct deposits and withdrawals that you authorize,
such as payroll deposits and automatic bill payment.
Ease of Use
Online accounts are easy to set up and require no more information than a traditional bank
account. Many offer the option of inputting your data online or downloading the forms and
mailing them in. If you run into a problem, you have the option of calling or emailing the bank
directly. One advantage of using online checks is that the payee's information is retained, which
eliminates having to re-enter information on subsequent checks to the same payee.
Bank accounts are safe
Your money will be protected from theft and fires. Plus, your money will be federally insured so if
your bank or credit union closes, you will get your money back.
Bank accounts are cheaper
Banks and credit unions generally offer their account holders free or low-cost services:
• Cashing checks: Using a check cashing outlet really adds up. You can deposit and cash your
checks at the institution where you have a bank account for free.
• Paying bills: Without a bank account, you probably rely on check cashing outlets, telephone
bill pay or money orders—all of which have attached fees—to pay your bills. With a checking
account, you can write checks for free or pay online at a low cost.
• Transferring/wiring money: If you use a money transfer company to wire money to another
person’s account, you will pay a fee, usually a percentage of the amount of the transfer.
Depending on the amount you want to transfer, this fee can be expensive. If you wire from your
bank account to another person’s account, your bank will usually charge a flat rate that is
generally lower than the money transfer company.
• Accessing cash: When you need cash but don’t have a bank account, you may decide to use
a credit card to get a cash advance from an ATM. The credit card company will charge you a
transaction fee and interest. If you have a bank account and an ATM or debit card, you can
access your money from your own bank’s ATM for free. Although you can access your money
from any ATM, you will likely pay a transaction fee if you use an ATM other than your bank.
Bank accounts can help you access credit
Banks and credit unions can help you access credit to acquire a home, a car, student or
personal loan, because banks tend to favor existing customers, particularly those who manage
their money well. Plus, going to small loan lenders that lend you cash quickly can be quite
expensive because they charge lending fees and high interest rates.
Go green, go paperless:
Deliver paperless statements directly into customers’ email addresses, while saving the cost of
printing, paper and delivery. The less wastage of paper makes this solution environment
friendly.
Loans
A bank can become more profitable by using a percentage of its deposits to lend to other
customers. If a bank pays 2% on bank deposits but lends money to firms and consumers at 6%,
then it can make a bigger profit on its deposits. A bank just needs to keep sufficient liquidity to
meet the demands of customers to withdraw money.
Pay Your Bills Online
One of the advantages of online banking is you can bank at home.You can use online banking
to pay your bills. This will eliminate the need for stamps and protect yourself from the check
being lost in the mail. Most banks will have a section in which you set up payees. You will need
to fill out the information once, and then you can simply choose that profile every time you pay a
bill online.
View Your Transactions
Online banking allows you to access your account history and transactions from anywhere. This
is the quickest way to check and see if a transaction has cleared your account. This can help
you to find out the amount of a transaction after you have lost your receipt. It also allows you to
find out about unauthorized transactions more quickly. This can help you to resolve the issues
more quickly.
Transfer Money Between Accounts
Online banking also allows you to transfer money between accounts much more quickly. It is
more convenient than using the automated phone service, and can save you a trip to the bank.
When you apply or set up your online banking, be sure that all of the accounts you have at the
bank are listed. This will make it easier to transfer money and make loan payments online.
Syncing With Your Money Applications
Many money apps will automatically sync with your online banking information. This makes
sticking to your budget much easier. Many apps will work both on your home computer and your
mobile device so you can stay up-to-date while you are on the go. It is also easier to track your
spending for your budget if you are using one of these apps.
Protect Yourself Online
It is important to be careful when banking online. You do not want your safety or privacy to be
breached. It is important to clear your cookies after each banking session if you are at a public
computer. Additionally, you need to make sure that your password is long enough to prevent it
from easily being hacked. Never give your online account information to someone who is not an
authorized signer on your account. Check your credit report regularly
BAD EFFECTS

Bank Relationship
A traditional bank provides the opportunity to develop a personal relationship with that bank.
Getting to know the people at your local branch can be an advantage when you need a loan or
a special service that is not normally offered to the public. A bank manager usually has some
discretion in changing the terms of your account if your personal circumstances change. They
can help you solve problems such as reversing an undeserved fee or service charge.
Transaction Issues
Sometimes a face-to-face meeting is required to complete complex transactions and address
complicated problems. A traditional bank can host meetings and call in experts to solve a
specific issue. In addition, international transactions may be more difficult (or impossible) with
some direct banks.
Services Not Offered
Some direct banks may not offer all the comprehensive financial services, such as insurance
and brokerage accounts, that traditional banks offer. Traditional banks sometimes offer special
services to loyal customers, such as preferred rates and investment advice at no extra charge.
Security
Direct banks are subject to the same laws and regulations as traditional banks, and accounts
are protected by the FDIC. Sophisticated encryption software is designed to protect your
account information, but no system is perfect. Accounts may be subject to phishing, hacker
attacks, malware and other unauthorized activity. However, one advantage of online banking is
that you are likely to find a security breach more quickly, because your account balance is so
accessible.
Technology Issues
In many ways, an online bank is only as good as your — or their — internet connection. If
there’s a power outage, or if servers go down, you might not have any access to your account
whatsoever. While some banks offer a phone number for customer service, it might be
overwhelmed if online access is down. With a real bank, you can always find someone to talk to
in the branch.
Security Issues
While many online banks are reputable and well-established, sometimes it can be hard to feel
comfortable with a bank that doesn’t have a physical presence, particularly when large sums of
money are involved. If a website suddenly folds up, what will happen to your money? There’s
also the risk of identity theft — or actual theft — if someone gains unauthorized access to your
account via a hacked or stolen password or log-in credentials.
Inefficient at Complex Transactions
Online banks might be able to transfer money between accounts or pay bills, but you might be
more comfortable with an international, bricks-and-mortar bank if you have complex
transactions. Worldwide, business-oriented banks like Chase have global transaction
capabilities, such as the ability to send payments to more than 35 different currencies
worldwide, that online banks might not be able to muster. Without a real-world presence, most
online banks can’t even offer the services of a notary public, which require an in-person visit and
necessary for most important financial transactions like buying a home.
No Relationship with Personal Banker
Over time, you can develop a relationship with a personal banker if you visit a traditional
bricks-and-mortar location. If you’re dealing with an online bank, on the other hand, you’re
typically handed off to an anonymous customer service agent who is unlikely to know you from
the next customer. If you’re really in a bind, financially speaking, having a relationship with
someone who can help and who knows you well can be a major advantage over a strictly online
banking relationship.
Inconvenient to Make Deposits
It might seem counterintuitive that a bank, whose purpose is to attract assets, makes it hard for
customers to make deposits, but that can be true in the case of some online banks. With an
online bank, you can’t simply drop off cash or a check at a local branch. In fact, some online
banks, like Ally Bank, won’t accept cash deposits at all. Using Ally Bank as an example, to make
a deposit you’ll have to mail a check, transfer money from another bank or another account, or
use the bank’s e-check deposit service.