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1.How does a bank differ from most other financial service providers?
A bank is a specific type of financial institution, and while it offers various
financial services, it differs from many other financial service providers in several
key ways. Here are some distinguishing features:
1. Deposit Services:
 Banks typically offer deposit services, allowing customers to open
savings accounts, checking accounts, and other deposit accounts.
These accounts often come with the ability to earn interest on
deposits.
2. Lending Services:
 Banks provide loans and credit services. They lend money to
individuals, businesses, and other entities for various purposes, such
as mortgages, personal loans, and business loans.
3. Fractional Reserve System:
 Banks operate on a fractional reserve system, where they keep only a
fraction of their total deposits in reserve. This allows them to lend out
the majority of the deposited funds, thereby contributing to economic
growth.
4. Central Bank Relationships:
 Banks often have relationships with central banks and are subject to
central bank regulations. Central banks play a crucial role in monetary
policy and may influence the money supply, interest rates, and overall
economic stability.
5. ATM Networks:
 Banks typically have extensive ATM networks, allowing customers to
access cash, check balances, and perform other transactions
conveniently.
6. Full-Service Offerings:
 Many banks offer a wide range of financial services under one roof,
including investment services, insurance, and wealth management.
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7. Regulatory Oversight:
 Banks are subject to rigorous regulatory oversight by financial
regulatory authorities. This oversight is designed to ensure the
stability and integrity of the financial system.
8. Payment Services:
 Banks provide payment services, such as wire transfers, electronic
funds transfers (EFT), and issuing credit and debit cards.
9. Branch Networks:
 Traditional banks often have physical branch networks where
customers can conduct in-person transactions, seek financial
advice, and access other services.
10.Safety and Security:
 Banks are typically perceived as stable and secure institutions.
Deposits in banks are often insured up to a certain limit, providing a
level of protection for customers.
While banks offer a broad spectrum of financial services, other financial service
providers, such as credit unions, investment firms, and insurance companies, may
specialize in specific areas. Credit unions, for example, are member-owned
cooperatives that provide similar services to banks but with a different
organizational structure. Investment firms focus on investment and wealth
management services, and insurance companies specialize in risk management and
coverage. Each type of financial institution plays a unique role in the overall
financial landscape.
2.Why are some banks reaching out to become one-stop financial service
conglomerate? Is this a good idea in your opinion?
The trend of banks becoming one-stop financial service conglomerates can be
attributed to several factors:
1. Diversification and Revenue Streams: By offering a wide range of
financial services, banks can diversify their revenue streams. This can help
them reduce dependence on traditional banking services and withstand
economic fluctuations.
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2. Customer Retention and Loyalty: Providing a comprehensive suite of

financial services makes it more convenient for customers to manage various
aspects of their financial lives in one place. This can enhance customer
retention and loyalty.
3. Competitive Edge: As non-traditional financial players, such as fintech
companies, enter the market with innovative services, traditional banks may
choose to expand their offerings to maintain a competitive edge and attract a
broader customer base.
4. Technological Advancements: The integration of technology allows banks
to offer a wider range of services efficiently. Online banking platforms and
mobile apps make it easier for customers to access and utilize different
financial products and services.
5. Regulatory Environment: Changes in the regulatory environment may
influence banks to explore new business models. Regulatory approvals and
frameworks that support a more comprehensive range of financial services
can encourage banks to expand their offerings.
Whether this trend is a good idea depends on various factors, and there are both
advantages and challenges:
Advantages:
 Convenience for Customers: Offering a variety of services in one place can
make it more convenient for customers to manage their financial affairs.
 Diversification of Revenue: Diversifying services can provide stability and
additional revenue streams, especially during economic downturns in
specific sectors.
Challenges:
 Risk Management: Operating in multiple financial sectors introduces
complexities in risk management. Banks need to effectively assess and
manage risks associated with different types of services.
 Competitive Challenges: Becoming a one-stop financial service provider
means competing with specialized companies in each sector. Banks need to
ensure they can deliver competitive and high-quality services in each area.
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 Regulatory Compliance: Operating in multiple financial sectors means

dealing with diverse regulatory requirements, adding complexity to
compliance efforts.
In conclusion, while there are both advantages and challenges, the decision for a
bank to become a one-stop financial service conglomerate depends on its strategic
goals, risk appetite, technological capabilities, and the regulatory environment.
When executed well, it can lead to a stronger and more resilient financial
institution.
3. What services do they offer that compete directly with banks services?
various technology and fintech companies offer services that compete directly with
traditional banking services. Please note that the landscape may have evolved, and
new services may have emerged since then. Here are some common areas where
these companies compete with banks:
1. Digital Payments:
 Companies like PayPal, Square, and Stripe provide digital payment
solutions, allowing users to send and receive money electronically.
2. Online Banking:
 Online-only banks or nonbanks, such as Chime, N26, and Revolut,
offer banking services without physical branches. They often provide
features like easy account management, budgeting tools, and fee-free
transactions.
3. Peer-to-Peer (P2P) Lending:
 Platforms like Lending Club and Prosper connect borrowers directly
with individual lenders, bypassing traditional banking intermediaries.
4. Cryptocurrency Services:
 Cryptocurrency exchanges and wallet providers, such as Coinbase and
Binance, enable users to buy, sell, and store digital currencies.
5. Robo-Advisors:
 Fintech companies like Wealth front and Betterment offer automated
investment management services, providing algorithm-based
investment advice and portfolio management.
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6. Personal Finance Apps:

 Apps like Mint and YNAB help users manage their finances, track
spending, and set budget goals.
7. Crowdfunding Platforms:
 Platforms like Kickstarter and Indiegogo allow individuals to raise
funds for projects or business ideas directly from the public.
8. International Money Transfers:
 Services like TransferWise (now Wise) and Revolut provide cost-
effective and efficient international money transfer services, often
with lower fees compared to traditional banks.
9. Business Financing:
 Fintech lenders, such as Kabbage and OnDeck, offer small business
loans and financing solutions with streamlined processes compared to
traditional banks.
10.Mobile Wallets:
 Mobile payment solutions like Apple Pay, Google Pay, and Samsung
Pay allow users to make contactless payments using their
smartphones.
It's important to note that the competitive landscape in the financial services sector
is dynamic, and new players may have emerged since my last update. Additionally,
regulations and partnerships between traditional banks and fintech companies can
influence the competitive dynamics in the industry.
4.What is happening to banking's share of the financial market place and
why? what kind of banking and financial system do you foresee for the future
present trends continue?
However, please note that developments in the financial sector can change, and it's
advisable to check more recent sources for the latest information.
1. Digital Transformation: The banking industry has been undergoing a
significant digital transformation, with the rise of online banking, mobile
apps, and other fintech innovations. This shift has changed the way people
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manage their finances, conduct transactions, and interact with financial

institutions.
2. Fintech Disruption: Fintech (financial technology) companies have been
challenging traditional banking models by offering innovative and often
more user-friendly services. This includes online payment platforms, robo-
advisors, peer-to-peer lending, and blockchain-based solutions.
3. Open Banking: Many countries are adopting or exploring open banking
initiatives, allowing third-party financial service providers to access
consumer financial data with their consent. This can lead to increased
competition and more personalized financial services.
4. Cryptocurrencies and Blockchain: The growing interest in
cryptocurrencies and blockchain technology has prompted discussions about
their potential impact on traditional banking systems. Some see
cryptocurrencies as an alternative to traditional currencies, while blockchain
is seen as a way to enhance security and transparency in financial
transactions.
5. Regulatory Changes: Regulatory frameworks are evolving to accommodate
new technologies and protect consumers. These changes can influence the
competitive landscape and the level of trust in financial institutions.
6. Shift in Customer Expectations: Customers are increasingly expecting
faster, more convenient, and personalized financial services. Traditional
banks are adapting to meet these expectations, but they face competition
from more agile fintech startups.
If present trends continue, the future of banking and the financial system might
involve:
 Increased Integration of Technology: Banks may continue to adopt
advanced technologies such as artificial intelligence, machine learning, and
big data analytics to enhance efficiency and offer personalized services.
 Greater Collaboration Between Banks and Fintech: Collaboration
between traditional banks and fintech firms could become more common,
with banks leveraging fintech expertise for innovative solutions.
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 Rise of Central Bank Digital Currencies (CBDCs): Some countries are

exploring or piloting CBDCs, which could have implications for traditional
banking and the financial system.
 Enhanced Security Measures: With the increased reliance on digital
transactions, there will likely be a continuous focus on improving
cybersecurity measures to protect financial assets and sensitive information.
 Evolution of Payment Systems: The way we make payments is likely to
evolve further, with the possibility of increased use of digital wallets,
contactless payments, and other emerging technologies.
It's important to note that predicting the future of banking is challenging, and
unforeseen events or technological breakthroughs can significantly influence the
trajectory of the industry. Monitoring ongoing developments in technology,
regulation, and consumer behavior will be key to understanding the evolving
landscape.
6. What different kinds of services do banks offer the public today?
What’s their closest competitors offer?
Banks and their closest competitors which may include credit unions, fintech
companies, and other financial institutions, offer a variety of services to the
public. The specific services can vary based on the type of institution and its
focus. Here are some common services offered by traditional banks and their
competitors:
Services Offered by Banks:
Deposit Services:
 Savings Accounts
 Checking Accounts
 Certificate of Deposit (CD)
 Money Market Accounts
2. Lending Services:
 Personal Loans
 Auto Loans
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 Mortgages
 Business Loans
3. Investment Services:
 Investment Advisory
 Mutual Funds
 Individual Retirement Accounts (IRAs)
 Brokerage Services
4. Payment Services:
 Debit and Credit Cards
 Wire Transfers
 Online Bill Pay
5. Risk Management:
 Insurance Products (life, home, auto, etc.)
 Safe Deposit Boxes
6. Wealth Management:
 Private Banking
 Estate Planning
 Trust Services
7. Electronic Banking:
 Online Banking
 Mobile Banking
 ATMs
8. Business Services:
 Business Checking and Savings Accounts
 Merchant Services
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 Business Loans
Services Offered by Competitors:
1. Credit Unions:
 Similar deposit and lending services as banks
 Membership-based ownership structure
2. Fintech Companies:
 Peer-to-peer lending
 Digital wallets
 Robo-advisors for automated investment management
 Online payment platforms
 Alternative lending options
3. Online Banks:
 Emphasis on digital banking
 Typically offer higher interest rates on savings accounts
 Limited or no physical branch presence
4. Insurance Companies:
 Life, health, property, and casualty insurance
 Annuities and other investment-linked insurance products
5. Investment Firms:
 Full-service brokerage
 Discount brokerage
 Asset management and financial planning
6. Payment Service Providers:
 Online payment processors
 Peer-to-peer payment platforms
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7. Robo-Advisors:
 Automated investment advice based on algorithms
 Generally lower fees compared to traditional wealth management
The financial services landscape is continually evolving, with technological
advancements and regulatory changes driving innovation and competition. Many
traditional banks are also adopting digital solutions to compete with fintech
companies and provide more convenient services to their customers. It's essential
for consumers to compare offerings and choose the services that best meet their
financial needs.
What is a financial department store? A universal bank? Why do you think
these institutions have become so important in the modern financial system?
A financial department store and a universal bank are terms used to describe
financial institutions that offer a wide range of financial products and services
under one roof. While these terms are sometimes used interchangeably, there
are subtle differences between them.
1. Financial Department Store:
 A financial department store is a concept that refers to a financial
institution, usually a bank, that provides a comprehensive array of
financial services. These services may include traditional banking
services (such as savings and checking accounts), investment services
(such as brokerage and advisory services), insurance products, and
other financial products.
2. Universal Bank:
 A universal bank is a financial institution that offers a broad spectrum
of financial services, including both commercial banking (traditional
banking activities like deposits and loans) and investment banking
(services related to capital markets, mergers and acquisitions, etc.).
Universal banks are essentially one-stop shops for various financial
needs.
Importance in the Modern Financial System:
Several reasons contribute to the importance of financial department stores and
universal banks in the modern financial system:
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1. Convenience for Customers:

 Offering a variety of financial products and services in one place
provides convenience for customers. They can manage their savings,
investments, and insurance needs without having to engage with
multiple institutions.
2. Cross-Selling Opportunities:
 Financial institutions can benefit from cross-selling opportunities. For
example, a customer who opens a savings account may also be
interested in investment products, and vice versa. This allows the
institution to deepen its relationship with customers and maximize
revenue.
3. Risk Diversification:
 Diversification of services helps financial institutions spread risk. For
example, during economic downturns, revenue from one segment
(e.g., investment banking) may decline, but revenue from another
segment (e.g., traditional banking) may remain stable or even
increase.
4. Economies of Scale:
 Universal banks can achieve economies of scale by consolidating
various financial services. This can lead to cost efficiencies in
operations, technology, and infrastructure.
5. Global Presence:
 Many universal banks operate globally, providing financial services
across borders. This global presence allows them to tap into diverse
markets and take advantage of international opportunities.
6. Regulatory Environment:
 In some countries, regulations encourage or require the separation of
certain banking activities. However, in other jurisdictions, regulations
may permit or encourage universal banking, allowing institutions to
operate across various financial sectors.
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While these institutions offer benefits, it's important to note that there are also
concerns about the concentration of financial power and the potential for
conflicts of interest. Regulatory frameworks aim to address these issues and
maintain the stability and integrity of the financial system.
8. Why do banks and other financial intermediaries exist in modern
society, according to the theory of finance?
The existence of banks and other financial intermediaries in modern society is
primarily explained by the theory of finance, which encompasses several key
concepts and functions. Here are some of the main reasons:
1. Risk Management:
 One of the fundamental functions of financial intermediaries is to
manage and mitigate risks. They play a crucial role in diversifying and
spreading risks across a wide range of assets and investments. By
pooling funds from various individuals or entities, financial
intermediaries can reduce the impact of individual defaults or market
fluctuations.
2. Information Asymmetry:
 Financial markets often suffer from information asymmetry, where
one party has more information than the other. Financial
intermediaries, particularly banks, act as information aggregators.
They collect and analyze information about potential borrowers,
helping to bridge the gap information between savers and borrowers.
3. Liquidity Transformation:
 Financial intermediaries facilitate liquidity transformation by
converting fewer liquid assets into more liquid liabilities. For
example, banks accept deposits (less liquid) and provide loans (more
liquid), helping to meet the varying liquidity needs of different market
participants.
4. Economies of Scale:
 Financial intermediaries can achieve economies of scale by pooling
funds from a large number of individuals and efficiently allocating
those funds. This allows them to reduce transaction costs and provide
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services, such as loans and investment management, at a lower cost

than if individuals were to directly engage in these activities.
5. Payment Facilitation:
 Banks and other financial intermediaries facilitate the smooth
functioning of payment systems. They provide services that allow
individuals and businesses to make transactions, transfer funds, and
engage in various financial activities, contributing to the overall
stability and efficiency of the economy.
6. Credit Creation:
 Financial intermediaries, particularly banks, have the ability to create
credit. Through fractional reserve banking, banks can lend out a
significant portion of the deposits they receive, effectively creating
new money. This credit creation process stimulates economic activity
and supports investment.
7. Intermediation between Savers and Borrowers:
 Financial intermediaries act as intermediaries between those who have
excess funds (savers) and those who need funds (borrowers). By
connecting these two groups, financial intermediaries help allocate
capital to its most productive uses, fostering economic growth.
8. Regulatory Compliance:
 Financial intermediaries are subject to various regulations and
oversight to ensure the stability and integrity of the financial system.
Regulatory bodies set guidelines to govern the activities of financial
institutions, protecting the interests of depositors, investors, and the
overall economy.
In summary, the theory of finance suggests that banks and other financial
intermediaries are essential in modern society to address issues such as risk
management, information asymmetry, liquidity transformation, economies of
scale, payment facilitation, credit creation, and efficient allocation of capital.
Their roles contribute to the functioning and stability of the financial system,
which, in turn, supports economic growth and development.
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11. What do you think the financial-services industry will look like 20 years
from now? What are the implications of your projections for its management
today?
Predicting the future is always challenging, and the financial-services industry is
no exception. However, we can identify some trends and potential directions that
might shape the industry over the next 20 years:
1. Increased Digitization and Technology Adoption:
 Continued advancements in technology, including artificial
intelligence, blockchain, and data analytics, will likely lead to
increased digitization of financial services.
 The adoption of decentralized finance (DeFi) and blockchain
technology could transform traditional banking structures, making
transactions more efficient, secure, and transparent.
2. Shift in Customer Expectations:
 Customers are likely to demand more personalized, convenient, and
user-friendly financial services.
 Fintech companies and tech-savvy startups may challenge traditional
banks by offering innovative solutions and a better customer
experience.
3. Regulatory Changes:
 Regulatory frameworks will need to evolve to accommodate new
technologies and business models. Governments may need to strike a
balance between fostering innovation and ensuring consumer
protection.
4. Rise of Big Tech in Finance:
 Large technology companies could play a more significant role in the
financial-services sector, leveraging their data and user bases to
provide financial products and services.
5. Increased Focus on Sustainability:
 There might be a growing emphasis on sustainable and socially
responsible investing. Financial institutions could face increased
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pressure to integrate environmental, social, and governance (ESG)

considerations into their operations.
6. Cybersecurity Challenges:
 As the industry becomes more digital, the threat of cyberattacks will
likely increase. Financial institutions will need to invest heavily in
cybersecurity measures to protect customer data and maintain trust.
7. Evolution of Payment Systems:
 The way we make payments is likely to undergo significant changes.
The adoption of digital currencies, central bank digital currencies
(CBDCs), and other innovative payment systems could reshape the
landscape.
8. Shift in Workforce Dynamics:
 Automation and AI could lead to changes in the workforce dynamics,
with a potential shift in job roles and skill requirements. Adaptability
and continuous learning will be crucial for professionals in the
industry.
Implications for Management Today:
1. Investment in Technology:
 Financial institutions should prioritize investments in technology and
innovation to stay competitive. This includes exploring and adopting
emerging technologies that can enhance efficiency and customer
experience.
2. Regulatory Awareness:
 Stay informed about regulatory changes and be proactive in adapting
to new frameworks. Engage with regulators to contribute to
discussions on the development of policies that foster innovation
while ensuring stability.
3. Customer-Centric Approach:
 Focus on understanding and meeting customer expectations. Embrace
digital channels and technologies to provide more personalized and
convenient services.
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4. Cybersecurity Preparedness:
 Strengthen cybersecurity measures to protect customer data and
maintain trust. Develop robust strategies for preventing and
responding to cyber threats.
5. Talent Development:
 Invest in talent development programs to ensure that the workforce is
equipped with the skills needed for the evolving landscape. Foster a
culture of continuous learning and adaptation.
6. Environmental and Social Responsibility:
 Consider integrating ESG principles into business operations and
investment strategies. Aligning with sustainability goals may enhance
the institution's reputation and attractiveness to socially conscious
customers.
7. Strategic Partnerships:
 Explore partnerships with fintech companies, technology providers,
and other industry players to leverage innovative solutions and stay at
the forefront of industry developments.
In summary, the financial-services industry is likely to experience significant
transformation over the next two decades, driven by technological advancements,
changing customer expectations, and evolving regulatory landscapes. Adapting to
these changes requires strategic foresight, agility, and a commitment to innovation.
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1.Financial system of Bangladesh

The financial system of Bangladesh is comprised of three broad fragmented sectors:

1. Formal Sector
2. Semi-Formal Sector
3. Informal Sector

The sectors have been categorized in accordance with their degree of regulation.

The formal sector includes all regulated institutions like Banks, Non-Bank Financial Institutions
(FIs), Insurance Companies, Capital Market Intermediaries like Brokerage Houses, Merchant
Banks etc.; Micro Finance Institutions (MFIs).

The semi formal sector includes those institutions which are regulated otherwise but do not fall
under the jurisdiction of Central Bank, Insurance Authority, Securities and Exchange Commission
or any other enacted financial regulator. This sector is mainly represented by Specialized Financial
Institutions like House Building Finance Corporation (HBFC), Palli Karma Sahayak Foundation
(PKSF), Samabay Bank, Grameen Bank etc., Non-Governmental Organizations (NGOs and
discrete government programs.

The informal sector includes private intermediaries which are completely unregulated.