1. Universal Banking

2. Universal Banking Works

3. Three forms of Universal banking

4. Functions

4.1 Commercial Banking

4.2 Investment Banking

5. Benefits

6. Services Offered by Universal Bank

Universal Banking

Universal banking could be a system during which banks offer a good style of comprehensive money services, as well as those tailored to retail, commercial, and investment services. Universal banking is common in some European countries, as well as Svizzera. In the US, by law banks square measure needed to separate their business and investment banking services. Proponents of universal banking argue that it helps banks higher diversify risk. Detractors suppose dividing up banks’ operations could be a less risky strategy.

Universal Banking Works

Universal banks could provide credit, loans, deposits, quality management, investment consultative, payment process, securities transactions, underwriting, and money analysis. Whereas a universal industry permits banks to supply a large number of services, it doesn’t need them to try and do, therefore. Banks in a very universal system should opt to specialize in a set of banking services.

Some of the notable universal banks embrace Deutsche Bank, HSBC, and ING Bank; inside the U.S., Bank of America, Wells urban centre, and JPMorgan Chase qualify as universal banks.

Universal banking combines the services of a billboard bank associate degree an investment bank, providing all services from inside one entity. The services will embrace deposit accounts, a spread of investment services, and will even offer insurance services. Deposit accounts inside a universal bank could embrace savings and checking.

Under this technique, banks will opt to participate in any or all of the permissible activities. They’re expected to fits all pointers that govern or direct correct management of assets and transactions. Since not all establishments participate in the same activities, the laws live could vary from one establishment to a different one. However, it’s necessary to not confuse the term “universal bank” with any money establishments with similar names.

Three forms of Universal banking

Universal Banking means that the money entities the business banks, money establishments, NBFCs, beneath take multiple money activities under one roof, thereby making a money grocery. The entities specialize in investing their giant branch network and provide a big selection of services beneath a single brand. Universal banking typically takes one in all the 3 forms:

•           In-house Universal banking. Eg. Germany, Svizzera

•           Through individually capitalized subsidiaries. Eg. England, Japan

•           Operations carried through a holding company1 .Eg. USA, Japan


The system offers services like quality management, auto loans, insurance, deposits, investment consultative, underwriting, mutual funds, credit cards, securities transactions, money analysis, bourgeois banking, payment process, factoring, housing finance, retail loans, etc.

Universal banks square measure a kind of advanced depository financial institution that gives associate degree exclusive vary of services beneath one roof. They’re updated versions of economic banks, however not all business banks square measure universal banks. The 2 main functions of this technique may be to work as a billboard further as an associate degree investment bank. These 2 functions square measure mentioned below

Commercial Banking

  • Commercial banking is all regarding understanding and obliging with the fundamental money desires and expectations of a standard client. These banks provide regular services sort of a bank account, accounting, and credit for meeting the fundamental needs of traditional customers. A customer’s credit rating is the deciding issue for the business banks to indicate their enthusiasm towards fulfilling their money desires and expectations. Halifax, Santander, and HSBC square measure fine samples of a billboard bank system.

Investment Banking

  • These banks work with entities or customers that participate in Broodings again savings. Investment banks settle for deposits from their customers and so invest constantly in multiple areas. These banks provide an enormous style of investment portfolios with totally different levels of risks. Customers fork out their hard-earned savings to banks in order that they’ll invest constantly and generate gains for the previous. The consultants employed at these banks aim to secure most from the investment choices offered. Investment banking should be finished heaps of caution as a result of there square measure equal possibilities of earning Brooding again losses too.


  • Universal banking could be a term for banks that supply a wider style of services than their competitors or compared with ancient banks.
  • Universal banking isn’t nevertheless common within the U.S, however, it’s growing; at once, banks within the U.S focus a lot of completely on investments than their European counterparts.
  • Banks in a very universal system should opt to specialize in a set of banking services, even supposing they technically provide rather more to their shopper base.

Services Offered by Universal Bank

Universal banks get to supply an enormous vary of banking and money services sort of a mastercard, housing finance, auto loans, insurance, retail loans, factoring, bourgeois banking, mutual funds, underwriting, investment consultative, payment process, securities transactions, deposits, quality management, money analysis, etc. Universal banking is outlined as a mixture of investment banking, retail banking, and wholesale banking. It offers an incredible style of services that the standard industry and its competitors fail to supply.

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

View All Articles