(a) Discuss any four trends in

a) Four trends in the banking industry

Digital

The first trend is digital transformation. The move towardsdigital platforms continues to dominate the agenda across thebanking industry. The need to compete with competitors, whiledecreasing costs and meeting the changing demands of customersmeans that there is no slowing down ongoing drive towards digitalplatforms and technology in banking.

Regulation

Regulation remains an important issue for the banking industry.Firms could well be caught off-guard, due to the fact that no newregulatory initiative is being introduced. This is unlike the lastfew years, where the introduction of MiFID and GDPR, among others,were launched to keep the sector on its toes. Without a new,headline-grabbing regulation, firms must be wary of becomingcomplacent on the matter.

Brexit

In the short-term, despite technology’s importance, Brexit isthe most significant area of focus for the UK banking industry.Mike Hampson, CEO of Bishopsgate Financial explained that theoverwhelming area of change planned for the year was Brexit. At 87%of respondents, the issue is clearly worrying the sector, withchange managers still seeking clarity from politicians the bestpart of three years since the process began.

Growth over restructuring

Finally, the banking industry will continue to refine its clientfocus and revenue growth. Focusing on revenue growth means thatcost reduction is no longer the overwhelming focus for changeleaders. This represents a major shift from the initial post-crashera, which since the 2008 financial crisis has seen banks focus onrestructuring, cost reduction, and rebuilding balance sheets. Thisyear, banks have finally opted to make use of the economicstability that has continued through several years of geopoliticalchaos. As a result, they have focused more heavily on revenuegeneration, product development, and entering new markets.

b) reasons why in evaluating bank’s performance Operationalprofit is usually not considered.

1. Does not necessarily equate to the cash flows generated by abusiness since the accounting entries made under the accrual basisof accounting can result in operating profits being reported thatare substantially different from cash flows.

2. A primary drawback of operating profit as a metric forassessing a company is it reveals a company’s profits and not itsprofitability.

3. investors cannot rely on operating profit as a sole metricfor comparison between companies from different industries.

c)

Assets

· Property

· Trading assets

Liabilities

· Loans from the central bank

· Deposits from customers

Equity

· Common and preferred shares

· Retained Earnings

d) methods of asset management​ ​

· Financial asset management

· Physical and Infrastructure assetmanagement

· Enterprise asset management

· Public asset management

e) limitations of Bank Regulations​ ​

1. Less Profit

Unnecessary control and heavy regulation may restrict banks toperform their tasks freely. So, banks cannot earn adequateprofit.

2. Failure

Banking regulation may control unnecessary banking activitiesbut it cannot prevent bank failure.

3. Costly And Time Consuming

Bank regulation is very costly and time consuming process.

4. Competition

Barriers to entry means reduced competition

a) Four trends in the banking industry

Digital

The first trend is digital transformation. The move towardsdigital platforms continues to dominate the agenda across thebanking industry. The need to compete with competitors, whiledecreasing costs and meeting the changing demands of customersmeans that there is no slowing down ongoing drive towards digitalplatforms and technology in banking.

Regulation

Regulation remains an important issue for the banking industry.Firms could well be caught off-guard, due to the fact that no newregulatory initiative is being introduced. This is unlike the lastfew years, where the introduction of MiFID and GDPR, among others,were launched to keep the sector on its toes. Without a new,headline-grabbing regulation, firms must be wary of becomingcomplacent on the matter.

Brexit

In the short-term, despite technology’s importance, Brexit isthe most significant area of focus for the UK banking industry.Mike Hampson, CEO of Bishopsgate Financial explained that theoverwhelming area of change planned for the year was Brexit. At 87%of respondents, the issue is clearly worrying the sector, withchange managers still seeking clarity from politicians the bestpart of three years since the process began.

Growth over restructuring

Finally, the banking industry will continue to refine its clientfocus and revenue growth. Focusing on revenue growth means thatcost reduction is no longer the overwhelming focus for changeleaders. This represents a major shift from the initial post-crashera, which since the 2008 financial crisis has seen banks focus onrestructuring, cost reduction, and rebuilding balance sheets. Thisyear, banks have finally opted to make use of the economicstability that has continued through several years of geopoliticalchaos. As a result, they have focused more heavily on revenuegeneration, product development, and entering new markets.

b) reasons why in evaluating bank’s performance Operationalprofit is usually not considered.

1. Does not necessarily equate to the cash flows generated by abusiness since the accounting entries made under the accrual basisof accounting can result in operating profits being reported thatare substantially different from cash flows.

2. A primary drawback of operating profit as a metric forassessing a company is it reveals a company’s profits and not itsprofitability.

3. investors cannot rely on operating profit as a sole metricfor comparison between companies from different industries.

c)

Assets

· Property

· Trading assets

Liabilities

· Loans from the central bank

· Deposits from customers

Equity

· Common and preferred shares

· Retained Earnings

d) methods of asset management​ ​

· Financial asset management

· Physical and Infrastructure assetmanagement

· Enterprise asset management

· Public asset management

e) limitations of Bank Regulations​ ​

1. Less Profit

Unnecessary control and heavy regulation may restrict banks toperform their tasks freely. So, banks cannot earn adequateprofit.

2. Failure

Banking regulation may control unnecessary banking activitiesbut it cannot prevent bank failure.

3. Costly And Time Consuming

Bank regulation is very costly and time consuming process.

4. Competition

Barriers to entry means reduced competition