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Commercial banks are private or public financial institutions whose main objective is to provide the necessary resources to finance, in the short and medium-term, commerce, industry, service providers, individuals, and third parties in general.
The collection of demand deposits, which can be freely traded, is a typical activity of the commercial bank, which can also take time deposits. It must be incorporated as a corporation and its corporate name must include the expression.
Commercial banks (BC) are corporations that have the objective of promoting the encounter between the surplus and deficit agents, as well as carrying out short and medium-term financial transactions. As they have a demand deposit, they create currency.
Among the activities carried out by the BCs, we highlight the granting of loans, credit operations, payment of checks, transfer of funds and money orders, rental of safes and custody of values, collection services, payment of public tariffs, and taxes and currency transactions.
The main source of funds for BCs are demand deposits, used to grant credit to consumers and businesses.
They are the basis of the monetary system ;
They are financial intermediaries that raise funds from creditors and distribute them through credit to debtors;
Their main objective is to provide the necessary resources to finance, in the short and medium-term, commerce, industry, service providers, individuals, and third parties in general;
They must be incorporated in the form of a corporation and, in their corporate name, must include the expression “bank”.
What Is Commercial Banking?
The Commercial Bank is a financial institution (in the public or private domain) whose main objective is to raise and provide financial resources in short to medium-term transactions.
It can serve both Legal Entities (such as companies in the industry, commerce, service providers, and more) and Individuals (employees, for example) acting as a financial intermediary.
It may seem like a strange concept when put so formally, but if you have an open account at an institution where you receive your salary and make transfers, be aware that this is a commercial bank. Or at least multiple banks – but don’t worry, we’ll explain the differences later on.
For now, it is worth knowing that these institutions collect funds from customers and transfer them to borrowers, charging interest and service fees for their operations. In this way, the so-called “bank spread” is created, the main source of revenue for commercial banks.
To grant these credits, banks raise funds through freely movable demand deposits (the main activity of commercial banking), and may also fundraise through time deposits (CDB).
These financial institutions must be incorporated in the form of a joint-stock company (society by shares ) and appear in their corporate name “ Bank ”
How To Become A Commercial Banker
Commercial banks provide financial services to individuals and corporations, such as payment, loan, and credit services. They are the largest type of financial institution within the banking industry and therefore present many opportunities for those interested in a career in banking. Learn how to become a commercial banker to be part of the banking industry.
Learn about commercial banks. Commercial banks are the ones that people use to store their money, finance their purchases with a credit card, and take out loans. The commercial banker assists individuals and organizations with these needs. However, the banking sector was affected by regulatory changes brought about by financial crises.
The lines between commercial banks, savings and loans, and investment banks have become blurred. This allowed commercial bankers to also offer financial planning and brokerage services.
Overview Of Commercial Banking Functions
The conventional operations of a commercial bank involve initiating and maintaining savings or checking accounts. Let’s look at some of the main or fundamental roles that these types of financial institutions play in the business sphere of individuals and companies.
Serial management of home or home operations and transfers; in particular, direct debit payments.
Tax collection operations or official fees.
Disclosure of checks and equivalents.
Management of user and customer deposits.
Granting loans and credits for the purpose of generating profits.
Merchandise from various economic products such as bonds, insurance, and investment projects.
Storage of valuable objects and safekeeping of important documents.
Intervention in the purchase and sale of foreign currencies.
It is a mediating component between the supply and demand of financial commodities.
Currently, commercial banks have grown in the virtual field, that is, technological advances in the network allow banks to exist in an online context.
Characteristics Of A Commercial Bank
Below we will show the characteristics that a commercial bank has in the following scheme, it is written in a simple way for you.
A commercial bank is categorized as a financial type body.
A commercial body provides financial products that are tied to the user or customer.
Commercial banks exist in two different modalities, both public and private.
They are for-profit organizations to acquire benefits, which differ from institutions that only offer help in isolation.
These banks work by paying fees and interest rates.
As a general rule, commercial banks are privately owned by a private group and act with the objective of being shareholders.
Commercial exchange banks maintain a larger core in providing business-level products and benefits.
Commercial banks earn financial resources through the purchase of products, services, and loans from customers who join the bank.
These banks have and provide financial security and protect the customer’s money.
As you can see, these are the main characteristics of a commercial bank, now we will explain what are the objectives pursued by these financial entities.
Objectives Of Commercial Banks
The objectives defined by commercial banking entities are important for the proper functioning, here we present the objectives they present.
Generate benefits like bonuses and benefits.
Promote the institution as a service provider.
Generate cash flows.
Career Change From Commercial Banking
The banking industry requires a substantial amount of work, including accounting and active sales. In total, the job can take anywhere from 40 hours a week to well over 60. You need to be detail-oriented and work hard to succeed in the commercial banking arena. Also, you will likely need good communication skills.
Bankers are just as likely to work outside the bank visiting customers and soliciting business.
The idea of bankers’ hours (9 to 5) has also changed as the banking industry tries to meet the needs of the public. Bankers now tend to work longer hours to market their services to potential clients.
n most cases, commercial bankers must hold at least a bachelor’s degree. Typically, these courses are in business, finance, or business administration; however, other courses, such as marketing, can be useful in certain areas of commercial banking.
Students planning to become commercial bankers, regardless of their specialization, must take a heavy load of classes in finance and accounting.
A person with just a high school diploma can also become a commercial banker, but only if they have a large amount of relevant or related experience.
Different Commercial Banking Career Paths
Working in a bank has its advantages. With a strong union, bank employees get annual salary increases and have interesting benefits defined in the Collective Bargaining Agreement, valid nationwide: minimum wages, profit sharing, daycare assistance, and food baskets are some examples.
Anyone who thinks of a bank immediately imagines a branch, with tellers, managers, attendants, and security guards, right? But the activity in this sector is complex and goes far beyond the agencies we see on the street. The variety of professionals hired is immense.
The most comprehensive in terms of opportunities for those who intend to work in a bank. This degree gives a good overview of the management of a company and allows for several career path within a banking institution: Human Resources, Strategic Planning, Operations, Marketing, and Sales are just a few examples.
Systems Analysis and Development
With a background that ranges from the most “hands-on” part of software development to coordination skills, this technologist can work on IT teams at banks or technology companies that provide services to financial organizations.
Database technologists can also work directly in banks, in the technology department, or in companies that provide IT services to the financial world. His work involves designing, modeling, implementing, documenting, testing, and managing databases.
This technologist can plan, implement and measure the effectiveness of bank communication actions, whether for internal or external audiences. It can also form Communication teams that manage the work of specialized agencies and advisors.
The Social Communication course may have an emphasis (qualification) in areas such as Journalism, Public Relations and Publicity and Advertising, for example. Each of these professionals can work differently within a bank, whether in the Sales, Communication, Marketing, Human Resources, or Customer Relations departments, just to name a few.
When we look for the services of a banking institution, we expect to find, in addition to the financial products that it can offer us, the support and endorsement of its main figure: the manager.
In certain situations, we believe that your presence is fundamental and essential for solving problems that, in fact, are not even directly linked to your work. And this makes us reflect on the Bank, Role and Responsibilities Manager. In our article today we’ll talk about what the real responsibilities of this position are.
To understand the real role of bank management, it is first important to understand how the banking system works. And more than just understanding the banks, it is interesting to understand how the National Financial System (SFN) works, and consequently, the role of the Bank Manager.
A branch is a division or extension of a company or organization. The number of agencies to be monitored will depend on the employer. Most of the time, the regional manager is responsible for selecting and overseeing staff, participating in community affairs to increase company visibility, and enhance new or existing business opportunities.
The regional branch manager must be ready to lead and guide his assistants for an efficient workflow. It is important for the individual to understand the most basic management skills such as planning, directing, problem-solving, and decision making.
They are needed to achieve desired results during day-to-day branch operations and to advance overall business. Some other tasks include developing business strategies for more effective customer relationships, increasing production through team motivation, and achieving targeted sales.
Commercial Banking Exit Opportunities
In other words, a commercial bank receives capital from individuals or companies looking to save. In this way, funds are raised to later be used for granting loans.
These banks can generate profits due to the interest rate they charge for the financing granted. Thus, they not only get back the borrowed money but also obtain additional income.
The usual activity of a commercial bank goes through the opening and maintenance of savings accounts or checking accounts. Through these products, customers make deposits, with the expectation of keeping their money safe and achieving a small return.
What Is Commercial Banking Job
Commercial banks are known by the vast majority of the population who need their services on a daily basis — whether to make payments, transfers or even to seek loans and financing.
With commercial banks, the population’s short, medium, and long-term financial needs are met. And because of this great demand, professionals who work in commercial banks usually have a highly valued job market.
Types Of Commercial Banking Jobs
It is the gateway for those who are studying to some degree. Anyone who thinks that banks only accept finance areas is wrong. Law, Administration, Information Systems, Human Resource Management, Logistics, and Marketing are courses that can also work in banks. Normally, salaries can start at R$1,500, but of course, it will vary depending on the course, the financial institution, and the location where you work. To achieve the long-awaited term, you will need at least a CPA-10. Some banks, however, already ask for the CPA-20 as a prerequisite.
The operator provides customer service and, in some cases, helps customers make transfers and operations at ATMs. For this position, a minimum of CPA-10 is required, and having to be attending an undergraduate course is a differential. Normally, the salary starts at R$2,500.
This professional is responsible for serving and attracting customers, presenting the company’s products, and has many goals to achieve. Salaries start at R$1,500 and remuneration can change according to the achievement of goals.
Practically all functions at the bank require knowledge in sales, but this specific position is what will be responsible for the evolution of the client within the branch and, consequently, for the consumption of new financial products.
Therefore, to act as a commercial agent you need at least the CPA-20. The agent is also responsible for maintaining a healthy and lasting relationship with customers, in addition to ensuring the good image of the company he represents, responding to any complaints and suggestions from customers. The salary starts at R$3,000 with variable remuneration depending on the achievement of goals.
He is the manager’s right-hand man, needs to have experience, be well qualified, and have at least the CPA-20. Salaries start at R$3,500 and may change depending on the institution and location.
It is the highest position in the banks. Of course, there are several managers of an institution, each one being responsible for a sector within the company. To get here, more than certifications, graduation, and experience, you will need to have successfully passed through those positions I mentioned earlier and some soft skills. Salaries exceed R$ 3,500 and its growth in the institution depends a lot on its ambition. How far do you want to go?
Become a Top Professional
There are several possibilities, right? Of course, this is a basic organizational chart of the functions that exist in a bank. Nomenclatures and titles may change from institution to institution, but it’s critical that you know that banks value people who have ambition. So, if you want to grow professionally, invest in a banking career. To stand out in the market, we created the Success Trail, where in addition to receiving certification courses, you receive other courses to develop and become a Top Professional.
Commercial Banker Salary
Commercial bankers are responsible for generating income from the sale of banking products to commercial customers. Factors such as previous experience and academic credentials often affect a commercial banker’s salary. In addition, salary levels also depend in part on the bank’s market presence and the size of the bank loan portfolio. according to the survey, a bank manager earns between R$ 3,400.00 and R$ 8,900.00, with a national average salary of R$ 5,348.70.
In many cases, bankers receive a basic salary and commission; in that case, a commercial banker’s salary may be subject to fluctuating sales results.
Many banks require applicants for commercial banking jobs to have successfully completed degree programs in subjects such as finance, economics, or business administration. Some banks pay a premium to bankers who have also completed advanced degrees in these same subject areas. Other banks promote personal bankers who have dealt with consumer customers in commercial banking roles; the salary of these individuals is sometimes lower than their college-educated peers.
In many cases, banks have multiple levels of commercial bankers. Senior bankers receive a portfolio of high net worth clients; these bankers are responsible for maintaining and developing these highly profitable relationships. Junior bankers are responsible for managing the accounts of small business owners, and these bankers generally have lower loan and deposit targets than their more experienced counterparts. Therefore, a commercial banker’s salary depends in part on his specific job responsibilities.