Investment products of banks


2018-03-21 00:28:12




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Investment products of banks — a relatively new opportunity, offered by financial institutions at different levels. Their essence is quite extensive, because there are many options to work with investments, however, the role of the Bank in most cases about the same — mediation. He relatively will rarely risk their own funds, preferring to use the money of the clients and for this providing them a portion of the income earned.

Features and causes of

The Need for such a tool, as investment products, is relatively recent. Up until this point banks quite a successful profit, taking loans for a small percentage and then providing them to their customers at a more significant rate. In addition, these organizations actively used their own money, because the Deposit rate is always less than the loan. Gradually, however, the market situation has stabilized, and now is like the difference if you can earn only relatively small by the standards of the banks money. As a result, financial institutions have begun to look for alternative possibilities of existence and came to the conclusion that the sale of investment products — the best method to earn money and to carry out further activities.

investment products

Investment banking products and services

Not all banks provide at least part of the possible services, varieties of which there are many. For example, most of the investment products or other financial organization consist exclusively of the services of trust management. That is, the Bank simply takes the money of the client and with his consent begins to use them on the stock exchange.

Typically, the organization prefers not too profitable, but reliable projects that will be likely to consistently bring some income. Such approach allows to timely and fully pay the account, and he, in turn, less to risk own money. However, this is not the only way to work with the specified financial instrument. The Bank may also accept securities, which will subsequently place on the stock exchange and to dispose of them at own discretion but with the consent of the owner. Also, the financial institution may just provide services for buying or selling those securities at the request of customers. In addition, the Bank can issue securities to provide loans for investment activities and so on.


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Implementation and creation of the product

To do financial institutions have the opportunity to use investment products in their activities to generate income, it must meet certain requirements. So, the first stage — obtaining the state license. Without this important document any such activities cannot be considered legitimate, and the client ideally needs to specify the presence of this paper and to demand its submission. Most banks do this without a reminder, posting such licenses to the public. To document is not too easy and still need to prove that in the process of working with an investment organization is not burned up, will be able to make a profit and so on.

The Next stage can be considered by the Bank in the international marketplace. In some cases, it must also provide access to it for their own customers, but this has is not always. Not to say that this is a difficult phase, because such platforms are interested in the continuous increase in the number of players, however, some efforts to make still have.

After this is done, you need to hire or train specialists who know how to work in this direction and make a profit. Otherwise, instead of the expected income to get a continuous expenses, but the Bank is almost fatally.

As a consequence of this requirement is necessary to create a structure within your organization that will engage in financial investments, on the one hand, and provide investment products to potential clients. Typically, these structures are divided at least into two branches, but this is a particular activity of each individual Bank.

investment products

The Last stage — the technical side of the question. The Bank may be registered in the system, obtain all required licenses, hire great professionals and to attract huge mass of customers, but if these same experts are not physically able to operate the trading platforms, all of these actions will be meaningless.

Potential problems

As with any activities, in investing, there are some problems. So, it is more risky in comparison with classical systems of earning income, there are many legal restrictions and tight control by the Central Bank. The latter may simply prohibit conduct the most profitable (but risky) dealsthis will disturb the overall stability of the financial system of the country.

investment products of banks

Investment loan products

This is another variant of the activities of financial institutions of the banking type, which is often offered by legal persons. Its essence lies in the fact that the Bank acts as an intermediary between the client and the investment object, giving the first loan, and due to him realizing the investment. Risky, but with luck and/or accurate calculation, it allows a legal entity to quickly repay debt, the object of investing — get the required amount, and the Bank — a part of profit. Generally all parties are satisfied with the transaction if it was successful and no problems arose.

new investment products


The Advantages offered by new investment products, quite numerous. The first of them is the size of profits. It is clear that the Bank receives, as a rule, more income than the client. But it also bears risks on its own (at least in most cases). The second advantage is the help of experts. Theoretically, any person may independently become a player on the stock exchange and investing at their own discretion. In fact, however, such an approach often will result in that person or entity will simply lose your money if you will not use the services of specially trained officers.


Of Course, there are always drawbacks. So, investment products still remain not only the most profitable financial instrument of all, but also the most dangerous from the point of view of possible risks. Most often, the Bank still returns to the client the amount that he placed, however, profits can not wait. Moreover, in some cases, when the situation with the income from the organization is very difficult, money back you can wait a very long time.

selling of investment products


Overall, given all the above, we can conclude that investment is a profitable investment, but only subject to the availability of guarantees to receive income and reasonable overall disposition of Bank funds obtained from customers. Unfortunately, this is often all can be determined only empirically or at best for reviews of other people or organizations, already have put their money.

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Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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