An Overview of the Canadian Financial-Services Sector: Banking Industry

The Royal Bank of Canada experienced some fundamental managerial errors in May 2003. It was reported as a major “glitch” that had been caused by wrong configuration during the installation process. A simple problem had severely affected the lives of millions of people. In this essay I will discuss the security and control problems such as the simultaneous upgrade of both the main and back-up systems. This will lead into the strategies management could have used to prevent these problems happening in the first place and what they can do differently in future. I will also explain how management neglected the public relations side of the issue which had customers questioning the reliability and stability of Royal Bank of Canada ultimately

Although the Canadian Bank oligopoly has traditionally been uncontested, the environment in which they operate is experiencing significant change. In order for retail banks to remain relevant in a decade, they must make significant changes to their business model. International political landscape tensions hinder international ambitions of banks and while the increased regulation is viewed as an additional burden, it is currently one of the rare forces keeping new entrants from dominating the entire industry. The Canadian population is facing a significant shift affecting the banks environment, their customer base includes an increasing proportion of millennials, women and visible minorities. Canada has the second largest population of foreign born habitants, and due to mass migration this trend will intensify.

Secondly, out of the twenty-five stockholders of the Bank, five of these were government owned. Thus showing support of the Bank by subscribing to one-fifth of its $35 million (Schlesinger 74). In addition, among the Bank’s functions was to hold all government money, sell all government bonds, and make commercial loans. However, no voters could dictate its policies or reign in its power, due to its privately owned status (Roughshod 2). Finally, the government also allowed bank notes to be used as payment for taxes.

The spokesman tells the family,” They breathe profits; they eat the interest on money. If they don't get it, they die…” Even though the bank isn’t completely broke, it needs money at all times. The spokesman also tells the family,”The bank—the monster has to have profits all the time. It can't wait. It'll die.” The cons of a bank having no money, outweighs the cons of a family having no money. The bank is a business which means people borrow money from the bank, people put money into the bank, the bank has assets they must meet in order to remain open. For example if a bank needs at least five hundred million dollars a year to remain open but only makes one hundred million dollars, then the bank wouldn’t

The other financial intermediaries include insurance companies, mutual funds and pension funds. In Japan, banks provide more financing than other financial intermediaries do. In the U.K., other financial intermediaries provide substantially more financing. In the U.S., banks are less important sources of financing compared to financial intermediaries. While in Europe, financing provided by banks and financing provided by other financial intermediaries are approximately equal.

Evaluate RBC strategy and organizational structure. Is RBC well equipped to compete with niche operators such as internet-only banks with focused product offerings?

There are various categories of banking; these include retail banking, directly dealing with small businesses and persons. Commercial and Corporate banking which offers services to medium and large businesses (Koch & MacDonald 2010). Private banking, deals with individuals, offering them one on one service. The last category is investment banking. These help clients to raise capital and often invest in financial markets. Most global banking institutions provide all these services combined. With all these institutions in existence within the same localities and offering similar services, there is a need to regulate the industry so as to protect the consumer and provide fair working environment for all banks (Du & Girma, 2011).

Now, many of these banking groups are owned by foreign investors, despite attempted safeguards. This ownership has provided investors leverage and influence over the actions of the government because the government owes an exorbitant amount to these banks (Daniel Lederman). The same argument can be made about the United States’ government. This influence can be seen across the board as many decisions now seem to favor only a select few, forgetting about the ramifications for the many.

Canadian Banks has never attracted that much of attention of the whole world until the subprime meltdown in 2007/2008. Canada was the only G7 country that did not have a government bank bailout. Canadian banks remained profitable through the crisis. A World Economic Forum report ranked Canada first among 134 countries on the soundness of its banks.

Financial technology is actually very prevalent in Canada. For instance, Toronto-Dominion Bank decided to enhance its cybersecurity by establishing an office in Tel Aviv to specifically focus on this issue (http://www.investmentexecutive.com/-/canadian-fintech-investment-steady-in-q3-kpmg). Moreover, according to John Armstrong, the National Industry Lead for Financial Services at KPMG Canada, “Canadian banks are proving to have the global mindset needed to ensure they are on top of future fintech opportunities.” (http://www.investmentexecutive.com/-/canadian-fintech-investment-steady-in-q3-kpmg) Futhermore, although the Financial Consumer Agency of Canada deems that financial techonology can not yet be fully trusted, it is still committed

As a result, the major Canadian banks provided services within their marketplace from insurance to retail brokerage.

Date: May 2011 Disclaimer This publication has been prepared as a general overview of the Banking Industry in Australia and does not constitute and is not intended to constitute financial product advice as defined under the Corporations Act 2001 (Cwth). Nothing in this document should be construed as a recommendation or statement of opinion intended to influence a person in making an investment decision. The information is made available on the strict understanding that the Australian Trade Commission (Austrade) is not providing professional advice. While all care has been taken in the preparation of this publication, Austrade expressly denies liability for any loss or damage of any nature (including but

A financial intermediary, by definition, is responsible for the process of transferring money from economic agents with a surplus of funds to economic agents with a deficit of funds, and is known as financial intermediation. This is achieved by means of a financial security, such as stocks and bonds. The mechanism that allows the trade of such financial securities is known as a financial market. Financial markets aim to facilitate the raising of capital, as well as the transfer of risk between economic agents and also international trade. Typically, the borrower will issue a receipt, or financial security, to the lender that promises to pay back the capital gained. Securities such as these can be freely bought or sold within financial

The purpose of this research paper is to examine the service marketing triangle and how it relates to the role of service employees in banks and financial institutions. Using academic journals and articles, this paper addresses the different aspects of the service triangle, including external marketing, internal marketing, and interactive marketing and the significance of adapting this strategy for bank service employees. By using this strategic framework, bank management will be able to monitor and understand the service employee’s role in the overall success of the bank.

As Bain (1992; p.5) states, ‘Financial intermediaries are institutions which attempt to serve the needs of both lenders and borrowers and are often able to reconcile the divergent requirements of borrowers and savers.’ It is important to highlight that there are several different financial intermediaries; banks, building societies, insurance companies and pension scheme companies, but in this case the role of the bank as an intermediary will mostly be considered.