Today, within the banking sector operate and intercommunicate every day a myriad of entities that focus on addressing the different problems that individuals or companies may have at specific times. Given that each person or company has different needs, the issue of banks is exactly the same and each bank deals with different functions and has different products. It is very important that, in order to get closer to the bank we need, we know 100% each of them and above all, which are the products it offers.
In turn, each one has different conditions and specialized personnel in what this type of entity offers. Although within Spain, the bank of Spain is in charge of seeing by all the financial institutions and what their different operations are, it is the government that gives the rules and requirements to each of the banks, based on the products that each of these banks offer. This means that each of the banks is governed by different rules. So that you know a little more about the world of banks, today we are going to talk about the different types of banks and how it works each one of them.
Types of banks based on ownership
In the classification of banks, something very important is the type of owner they have, since this will put you in one category or another. The main types of banks that are known are:
What are private banks and how do they work?
Private banks are banks in which the shareholders of the same are various private entities or even individuals with a large investment. This type of bank became famous a few years ago and one of the best examples is the popular ING direct bank.
What are public banks and how do they work?
As far as public banks are concerned, this type of bank is entirely owned by the state. These banks are the best known and have usually been there for a lifetime. A good example of this type of bank is the bank of Spain or the European central bank.
What are mixed banks and how do they work?
Mixed banks, as their name suggests, are banks that have private capital and, in turn, have public capital. These types of banks are also very well known and the ones that people normally use. The government of Spain. It gives capital injections to these banks through the FROB.
The different types of bank depending on their activity
Among the most interesting classifications, there is also the function or vision of said bank. Although at first glance, it seems that all banks are the same, it is the mission that will tell you what the objectives of said bank are and based on that, what is its client portfolio. Within this list we can find:
The issuing bank or central bank, what are they and how do they work?
This type of bank is called "the bank of banks." From here, what is tried is to supervise and direct the entire financial system of the country. This type of bank is in charge of setting policies based on currencies, issuing currencies to the country, in addition to keeping all the country's reserves in perfect condition. Within Spain, the entity that is in charge of this is the Bank of Spain, which is the entity that is in charge of the entire Spanish financial panorama; however, the entity that really has control of absolutely everything is the European Central Bank.
What are commercial banks and how do they work?
Commercial banks are those that are focused on serving the consumer. These banks are the ones in charge of giving loans, making deposits, etc. These types of banks are not investment banks.
The separation of the banks at this level, occurred in the year 1929 by orders of the US when it was sought to avoid a collapse in finances. Although in Europe there is no law that separates finance, many banks carry it out for safety.
Investment banks, what are they and how do they work?
Within investment banks, we find all the products related to the future. These banks are focused on both companies and individuals and within these banks you can find options such as the acquisition of companies or the merger of two. Here, you can also access the sale of securities on the market and get good advice in order to get good operations in the future.
What are corporate banks and how do they work?
In corporate banks, there are clients that are mostly companies. Here there are specific products that help companies to develop their activity. These types of products are those that are related to lines of credit, discounts on promissory notes, payments and income from checks or receipts in order to charge for services.
What are consumer banks and how do they work?
Within consumer banks, there are individuals. These types of banks are the ones we visit every day and where we can find personal loans, mortgages to buy the house of our dreams, request for credit cards, presentation of guarantees for mortgages or credits, etc.
Savings banks, what are they and how do they work?
These savings bank entities in Spain are non-profit entities. Although there is almost no trace of savings banks after the crisis of recent years (because many were transformed into banks), these types of entities existed in order to offer social work to both individuals and companies in order to give them the possibility of having savings banks.
What are mortgage banks and how do they work?
These types of banks are very popular when it comes to granting loans in order to buy a property. This bank is attended by both individuals and companies.
Within Spain, you cannot find this type of bank as such, since they are very famous in the United States but have not yet spread, however, there are already some companies in Spain that you can go to for this purpose.
Treasury banks
These types of treasury banks are known among companies and not so much at the person-to-person level. These banks are in charge of giving companies capital injections, in order to help them re-emerge. This type of entity does not have offices open to the public.
Official credit institutions, what are they and how do they work?
All the Official credit institutions are the ones in charge of operating within Spain through the official credit institute. These types of entities have a business-only function that has direct contact with the Ministry of the Economy. Among the main objectives of this type of entity is the purpose of growing and giving the ability to almost completely improve the wealth found at the national level, as well as the correct distribution of it. To this end, it seeks to increase all kinds of economic and cultural activities, not only in order to increase work, but also to increase tourism in that place.
The ICO is the in charge of supporting this type of project in order to inject capital into companies around Spain. They do this in order for said companies to be more competitive among themselves and to contribute to the progress of the country as a whole.
In addition, this platform helps and encourages companies to collaborate through economic policy programs when problems arise from natural disasters or economic crisis situations.
As you can see throughout this post, it is not as simple to approach a bank as we thought, since we must know what that bank offers us to ask exactly what we want and above all, so that we can be personally attended to in what we want get.
Each of the banks have established standards on products that you can offer, however, sometimes and in order to win over some customers, they offer products for which they are not 100% qualified. Although the Bank of Spain tries to keep all these kinds of things under control, the importance that we are also informed about what each type of bank can offer us and for what purpose, makes all our businesses and requests within it, much more safe.
Even so, the best option is to approach our trusted bank and tell them what we want to achieve, normally, within the same bank it has different branches and in each of the banks there is usually a professional from each of them so that we can go to him before any kind of doubts.
