Logistics division. Bank production function
Category: Bank Management
Since banks have to manage the financial assets of their clients, a tight control of the treatment will consist in steering the flows and updating the stocks.
This role is filled by the bank production function.
This activity has been deeply changed because of the arrival of electronic data processing and because of the increasing needs of other divisions such as networks, finance, marketing.
Managing deposits
The bank production function controls the management of current accounts:
— opening accounts, modifying and closing them
— special accounts such as firms, real estate agencies
— special operations such as estate, blacklisted bankruptcy
— checking of regulations.
Managing savings
Most savings accounts have to comply with recommendations issued by public authorities
opening saving accounts rules
calculation of interest
special events
appropriation rights
respect of rules.
Managing securities
This function manages all types of securities held by customers in the bank such as shares, bonds, certificates, mutual funds securities, insurance products, derivatives, etc.
subscription
Getting connected to the market to buy or sell
keeping securities
giving the information forwarded by companies
acting as an intermediary in take-over bids
paying interest, coupons and dividends
transmitting fiscal documents to customers
Business is complex but can be profitable if prices for services are right.
Managing the circulation of money
The payment instruments and the financial flows will circulate on the collection circuit;
they consist of different instruments such as cheques, bills, transfers, credit cards and are used between national and foreign institutions.
a) Collection circuit problem
Two different circuits have to co. exist on every operation:
there is one for the support and one for the financial flow.
To avoid delays that cost money to the bank, there is a tendency to automate and process.
The objectives are:
to lower the costs
to reduce double treatments
to optimise usage of circuits
b) The instruments
Paper supports such as cheques and bills are physically exchanged between banks
Electronic circuits through interbank systems give more fluidity to exchanges, i e operations can be done at any time
credit cards circuits are more and more important; banks look for better productivity and security on transactions
International circuit: International banks use the network set by swift company to make payments, cash operations, to forward documentary credits; messages are standardised.
General means of production function
This function deals with the managing of buildings and movable of the bank.
Buildings are either bought or rented by the bank; this concerns the Head Office, branches and production centres.
Movable (machines, furniture’s, computers) are either bought or leased.
There is a department that looks after these properties.
Managing these properties partly consists in selecting the best accounting method from a tax point of view.
There is a function dealing with the transmission of information (post, telephone, etc.)
Together with the marketing function, this department is in charge of organising points of sales and of monitoring ongoing studies.