external image Riyad_Bank_saudi_arabia.jpg´╗┐´╗┐Banks

A bank is a financial organization where people deposit their money to keep it safe. A bank is a business like any other. A bank needs to make a profit to cover their costs. The diagram below shows you how a bank earns its money to stay in business.
external image bank.jpg

Banks are payment agents, where each customer has bank accounts. A bank is used to pay cheques issued by the client on the bank, and collecting cheques deposited to the client's current accounts.

Banks are tied with savings and loan associations, credit unions and other mutual savings banks.

Using the client's own bank accounts, he can make payments through other methods like ATM and EFTPOS.

Unlike online banking, traditional banking provides actual human interaction. Clients communicate with the banking staff. Unfortunately there can be long queues, clients are required to have transportation to and from the banks. The businesses have to actually rent for working premises and are recruiting more staff than an online bank or business of some sort. This is more costly for the banks.

Related links:
Banks "forcing people to use ATMs"