Banking on Financial Services Information

By Ojala, Marydee | Online Searcher, May-June 2016 | Go to article overview

Banking on Financial Services Information


Ojala, Marydee, Online Searcher


Banking is an industry under increasing scrutiny. It's not only the various regulatory agencies worldwide showing a heightened interest; it's also the investment community. Everybody wants financial institutions to be solvent and stable. Investors look for profitability. They expect to invest in companies that make money and, more importantly, see share prices rise. In that sense, financial services is just like any other industry. However, financial services has unique characteristics, making researching it a bit different from other industries.

Structural changes in the industry, technological innovations, and globalization have affected how regulators, investment analysts, and the general public view financial institutions. The structural changes stem from legislation and from mergers and acquisitions. In 1999, the Gramm-Leach-Bliley Act supplanted the Glass-Steagall Act that separated commercial from investment banking. Financial institutions are now free to offer many more services, such as underwriting securities, than they could in the past.

One result of technology advances is that the public no longer jokes about "bankers' hours," since they can access their accounts 24/7 from their phones. And they expect their financial institutions to be "always on." Internet banking put paid to the old 3-6-3 banker joke--bankers paid 3% on deposits, charged 6% interest on loans, and were on the golf course by 3 p.m.

Microlending, in which individuals loan small sums to other individuals, added yet another dimension, by creating a banking infrastructure without any banks. SocietyOne, an Australian lending company backed by Consolidated Press Holdings, News Corp Australia, Australian Capital Equity & Reinventure, and others, takes online lending to a higher level. Essentially, SocietyOne connects investors and borrowers online, making it look like a bank although it has no actual cash.

As U.S. banks grow larger, now that they are allowed to operate on the national stage and are not limited to one state or an even more restricted geographical area, and become more global, they need to put more effort into knowing their customers. I once lived in a small town where, if you walked in the door of the local bank without your driver's license, the banker would accept your library card as proof of identity. That couldn't happen today; you'd need many more pieces of identification, and adding people to an existing account, particularly if they're not physically near current authorized signers, requires an enormous amount of effort.

The financial services industry encompasses banking, credit unions, insurance, credit card companies, accounting firms, consumer finance companies, stock brokerages, and investment funds--all of which deal with money. Once discrete entities, overlaps in functionality and ownership are now common. This column concentrates on the banking piece of the financial services industry.

BANKING ON THE NEWS

Read any newspaper or newsmagazine, whether in paper or electronic form, and you're likely to see something about banks. Locating these articles is not difficult, given the proliferation of news online and in subscription databases. Websites of individual news sources, web news aggregators such as NewsNow (newsnow.co.uk), and business databases, particularly Factiva, LexisNexis, and ProQuest's ABI/INFORM, have robust industry terms and codes for banks and banking.

Unless you're searching a database that only contains financial industry information, such as ProQuest Banking Information Source, or a publication devoted to the industry, such as the American Banker (AmericanBanker.com), simply entering the word banks is going to retrieve information unrelated to financial institutions. It could be river banks or the Banks family (of Mary Poppins fame).

Want to make your search more specific to the industry? In the news for the past few years has been the concept of stress-testing banks. …

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