Banks are a business, and you are the cash cow

[Poker Player]

I don’t think banks really care about monthly fees. Most banks will waive the fee if you are a student or if you have a certain balance at the end of the month.

The way they make money is by loans and mortgages. With expensive real estate these days they get hundreds of dollars of interest each month per mortgage pretty much. And the collateral is very safe since it’s real estate.

Instead of simply saying what you think, you could have spent a few seconds to search the internet, and you would have realized that what you think does not match reality.

A review into banking by the Financial Conduct Authority (FCA), the City watchdog, has found that around 40% of the value that major banks obtain from current accounts is by using customers’ credit balances as a funding source, followed by overdraft fees and charges, which account for 30%.

Source: Overdraft fees and charges are major source of income for banks

That it is the second largest source of revenue, accounting for 30% of revenues is no small feat. There are always exceptions, such as the case of the students you mention, because they know that they either have no income or the income they have is very low, and they prefer to establish a business relationship now, to earn more money from them in the future. It is a long term investment.

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[Gallar]

that's how banks work to get money,
provide services for a fee.
but I understand what he's doing, and I'm going to be neutral on this.
if the bank does not charge such fees, how does the bank pay its employees, how does the bank replace funds whenever there is a loss (such as a borrower running away and not paying), and that all must be taken into account.
I don't completely hate the bank, because I don't see it from the point of view of the fault. even though the bank is indeed extorting profits from its customers, but still the bank has its own services for people around the world.

I invest in bitcoin through the bank, and so do withdraw my earnings through the bank. and do you still use bank services? (to search for your investment, withdraw money, and to fill in certain balances).
Even though the bank has quite a big mistake, I also will not forget the ease of transactions that have been provided by the bank. Like many ATM machines, it makes it easier for me to withdraw money when I need it or in an emergency, and that's a positive thing too.
The bank does extort in terms of costs, but that's reasonable because the bank is not a company that is inhabited by several employees and not only extorts, but also provides services. in essence, I'm just open-minded about all the incidents regarding this bank.

I write this from my positive point of view

[gaston castano]

I think if you use it properly the bank can help someone to improve their business. but most people are trapped in loans to pay off their bills, so as you say they are cows being squeezed,until now I have never borrowed money from a bank to repay things that I don't really need.

[YUriy1991]

I think The statement "Banks are a business, and you are a cash cow" is a common sentiment among those who believe that banks are solely interested in making profits at the expense of their customers. While banks are indeed a business and their main goal is to generate profits, it is important to note that they also provide an important service to society by facilitating the flow of money and credit, promoting economic growth and development.

Even so, banks do make money in various ways, some of which are mentioned in the sources provided. For example, banks earn interest on loans made to individuals and businesses, charge fees for various services, and make money through investments. While this practice may appear exploitative, it is important to understand that banks also assume the risks associated with lending and investing, and therefore charge fees and interest rates to cover those risks.

It is true that some banks engage in fraudulent activities, such as manipulating transaction history and charging exorbitant fees. Such practices are unethical and should be condemned. consumers need to educate themselves on simulating charges associated with their bank accounts, credit cards, and loans, and be vigilant about monitoring their transactions to prevent them from being taken advantage of.

[Alpha Marine]

Banks don't get any money from anywhere else other than customers' funds. It's those funds that they use to invest to get their money through profits.
Just know that when you deposit your money in the bank it's like lending money to a person. That person might keep that money for you or he can use it to do his own business and make a profit. If he does any business with the money then two things are involved, the investment might either fail or succeed, If it succeeds then your money is safe, if he fails then your money is not safe, either way, he's not losing much because it was not his funds that were at risk.
The funny part is, if an individual starts doing exactly what the banks are doing then hell be termed a fraud but it's totally okay

[Plaguedeath]

If you don't want to get many fee charges from the banks, just hold your fiat in your home!

If you think the loan interest is too high and looks unfair, just don't take any loan from banks!

As simple as that, this make you not getting involved with banks, but you're need to deal how to protect all of your money in your house and the inflation rate which occur for every year. I don't suggest you to hold fiat, but based on your thread the problem is about banks.

[un_rank]

I don't suggest you to hold fiat, but based on your thread the problem is about banks.

If banks mess their job up it affects all holders of fiat. Economic crisis are usually results of poor actions made by banks.

Keeping fiat in our homes away from banks would not be a solution, you still deal with inflation and now have to safely store as much amount of cash that you own and prevent it from getting damaged.
You need several bags to hold $15,000 worth of cash, the lower the national currency, the higher the bags you would need. You only need a hardware wallet not much bigger than a USB stick to hold as much as $15,000 (or any amount) in Bitcoin.

- Jay -

[LogitechMouse]

Well, it's obvious that they are a business because if they're not, I mean how would large banks survive without any revenue at all. I did a quick search on how they are earning, and base on one website, I saw this: LINK

Banks generally make money by borrowing money from depositors and compensating them with a certain interest rate. The banks will lend the money out to borrowers, charging the borrowers a higher interest rate and profiting off the interest rate spread.

It's almost the same as those lending applications that we are seeing in the crypto space like Celsius, NEXO, etc. but the interest there is just way higher.

The problem right now is that, people have been taught that the best way to save their money is thru putting it in a bank. These banks taught those people to save their money in them because it's the safest way of saving money. People in the past are the ones who had this thinking of the best way of saving money is to put it into banks, and it has been passed from other people. TBH, most of the people who are using banks don't know that they are being used as a "cash cow" because why will the banks teach it to them that they will use their money to lend it out to borrowers.

I don't know if there's any solution to it, but it's good that I saved money in a different way, and for a different reason because I'm not saving just for the sake of saving, but I'm saving so I have money to invest with, and I will never put any money on banks unless it's an emergency funds. On the other hand, I think there's still good things that banks are providing to their customers. I just don't know what they are because I'm not using banks that much. Maybe the fact that you can get a loan from them as long as you have good credit is considered a benefit for the customer.

[Ndabagi01]

Fiat banks in general have advantages and disadvantages, but the truth is that we can't do without banks for the time being, even if we're anticipating a decentralized system. If at least 50-70% of the people you do business with don't like or tolerate the use of decentralized currencies, it will be more difficult to live with the reality.

Banks are here to do business, and we are undoubtedly their regular clients. The fees for each service simply vary in order to entice customers to choose which services best suit them and which they will use. Having said that, their fees are relatively reasonable for both new and existing customers, and they always have a way to persuade their customers when they are at fault or want to improve or increase the fees for their service. We know that the government always has their own share of the fees we are charged for because they regulate the centralized system.

[Yogee]

that's how banks work to get money,
provide services for a fee.
but I understand what he's doing, and I'm going to be neutral on this.
if the bank does not charge such fees, how does the bank pay its employees, how does the bank replace funds whenever there is a loss (such as a borrower running away and not paying), and that all must be taken into account.

Service fee is probably the least source of income for all banks so they have enough to cover salaries and wages. It's not easy to get a loan you know. Banks usually ask for a collateral from large borrowers do they not? That means they are really not at a loss when a loan is defaulted. They also have a lot of ways to collect even if it's non-collateral like utilizing collection companies.

[Queentoshi]

I think if you use it properly the bank can help someone to improve their business. but most people are trapped in loans to pay off their bills, so as you say they are cows being squeezed,until now I have never borrowed money from a bank to repay things that I don't really need.

Banks are business and they are using our money to do business and not giving us anything in returns, cause come to think of it, we pay for every transaction we do, pay for card maintenance, we pay for SMS charge and by the end of the day and we are the one running on a lost, some times I get debited and I don't even know what for. Not all accounts are granted business loans, and the majority of the account this banking sectors make their money from are the people who has a normal account collecting unnecessary charges. Like the topic we are the cash cow.

[CageMabok]

I think if you use it properly the bank can help someone to improve their business. but most people are trapped in loans to pay off their bills, so as you say they are cows being squeezed,until now I have never borrowed money from a bank to repay things that I don't really need.

Taking a loan from a bank is like that, because you will always feel endless pressure before you pay it all off. So it's better to consider it before you start taking loans, because banks are also people who need customers who are able to rotate their money so they can benefit from their own customers. Now try to use bank services as wisely as possible so that you get comfortable without feeling too much pressure on yourself.

[Gallar]

that's how banks work to get money,
provide services for a fee.
but I understand what he's doing, and I'm going to be neutral on this.
if the bank does not charge such fees, how does the bank pay its employees, how does the bank replace funds whenever there is a loss (such as a borrower running away and not paying), and that all must be taken into account.

Service fee is probably the least source of income for all banks so they have enough to cover salaries and wages. It's not easy to get a loan you know. Banks usually ask for a collateral from large borrowers do they not? That means they are really not at a loss when a loan is defaulted. They also have a lot of ways to collect even if it's non-collateral like utilizing collection companies.

indeed, if you want to borrow money from the bank, you are always asked for a guarantee commensurate with the loan, and it is mandatory to do so.
here I will tell you a little about people around me who have borrowed money from banks.

my neighbor borrowed money from the bank, with a guarantee of motorbike ownership certificates. If the motorcycle is sold, the price ranges from 3,000,000 Rupiah, if in dollars it is around $ 200.48. and all went well, the borrower also got the loan of 3,000,000, with an interest of 15%, and with installments of three years.

after three years the borrower finally paid off the debt. and didn't wait for a while, the bank immediately offered a second loan to this customer/borrower, and this time the bank offered a direct loan of 15,000,000 if you put it in dollars around $1,000.39. With the same interest, three year installments, the same collateral i.e. the motor vehicle ownership certificate, and the motorbike if sold is around 3,000,000 ($200.48). why is the customer being offered a direct offer with a larger loan? because the customer is smooth in paying monthly installments.

but what happened when this second loan was that the borrower was not smooth in paying, he was in arrears for almost five months without paying, even though the installments had only been running for seven months. and the bank was forced to confiscate the collateral for the motor vehicle ownership certificate along with the motorbike, and the borrower with that has nothing to do with the bank, the point is paid off with the guarantee.

the question is whether the bank did not lose, lent 15,000,000 ($1002.39) and the borrower was not smooth in its payments, and only got a motorbike that cost 3,000,000 ($200.48) with an additional two months installment. Obviously it is a loss on the part of the bank.

that's one customer, imagine if 100 to 1000 customers, that's quite a loss for the bank.

[Freddie Boyer]

that's how banks work to get money,
provide services for a fee.
but I understand what he's doing, and I'm going to be neutral on this.
if the bank does not charge such fees, how does the bank pay its employees, how does the bank replace funds whenever there is a loss (such as a borrower running away and not paying), and that all must be taken into account.

Service fee is probably the least source of income for all banks so they have enough to cover salaries and wages. It's not easy to get a loan you know. Banks usually ask for a collateral from large borrowers do they not? That means they are really not at a loss when a loan is defaulted. They also have a lot of ways to collect even if it's non-collateral like utilizing collection companies.

indeed, if you want to borrow money from the bank, you are always asked for a guarantee commensurate with the loan, and it is mandatory to do so.
here I will tell you a little about people around me who have borrowed money from banks.

my neighbor borrowed money from the bank, with a guarantee of motorbike ownership certificates. If the motorcycle is sold, the price ranges from 3,000,000 Rupiah, if in dollars it is around $ 200.48. and all went well, the borrower also got the loan of 3,000,000, with an interest of 15%, and with installments of three years.

after three years the borrower finally paid off the debt. and didn't wait for a while, the bank immediately offered a second loan to this customer/borrower, and this time the bank offered a direct loan of 15,000,000 if you put it in dollars around $1,000.39. With the same interest, three year installments, the same collateral i.e. the motor vehicle ownership certificate, and the motorbike if sold is around 3,000,000 ($200.48). why is the customer being offered a direct offer with a larger loan? because the customer is smooth in paying monthly installments.

but what happened when this second loan was that the borrower was not smooth in paying, he was in arrears for almost five months without paying, even though the installments had only been running for seven months. and the bank was forced to confiscate the collateral for the motor vehicle ownership certificate along with the motorbike, and the borrower with that has nothing to do with the bank, the point is paid off with the guarantee.

the question is whether the bank did not lose, lent 15,000,000 ($1002.39) and the borrower was not smooth in its payments, and only got a motorbike that cost 3,000,000 ($200.48) with an additional two months installment. Obviously it is a loss on the part of the bank.

that's one customer, imagine if 100 to 1000 customers, that's quite a loss for the bank.

It seems to be a common practice for banks to require collateral equivalent to the loan when borrowing money. However, the cases presented here show how banks end up losing money despite having collateral.

While it is true that banks offer larger loans to customers because of their smooth repayment history, the borrower's failure to make payments results in the bank seizing collateral that is only worth a fraction of the loan. In my view, if this happens to a large number of customers, it can indeed result in a sizable loss for the bank.

[ancafe]

Banks are made out to be an essential service for the benefit of society similar to other basic amenities we use to get through our needs, but in reality banks are businesses and we are the profit, meaning we exist and patronize the banks to make money for them.

In this aspect, we have been taught by previous people (parents) that saving money in the bank is not the best solution to maintain the value of the currency we have, the rest we are advised to buy gold as a substitute for these savings. Today what our parents said before is proven, that the money you put in the bank in the past has lost value.

Bitcoin has almost the same function as gold even though the journey is different and can maintain value even though it fluctuates, but for reasons that are wiser to use money to invest in bitcoin than keeping money in the bank is much better, because you will see opportunities that are different from the previous mindset, every decision is one's way of seeing opportunity.
 

Banks are designed to profit at your expense, through legitimate or even fraudulent ways, and with the protection provided for them, they can fail multiple times and would be bailed out, to ensure you continue to trust their services and keep your money with them.

They will continue to suck your blood to process bank trips, without us they will never develop and it can be said they will never be able to provide salaries to their employees. This system can make them profitable and we are only given interest from the overall profits of the savings we have.

But what you need to understand is not the banks that make all of this messier, but rather the system they employ and try to make profits at ridiculous multiples. If you have ever heard of the Muamalah (profit sharing) system, that is the correct system for maintaining financial stability, both for individuals and for the state.

[Accardo]

When we deposit our money in the bank, the bank lends our money to other customers and takes interest from it at a fixed percentage rate. But if we keep our money in the bank only as savings then the bank gives us only 1-2% APR. And if we keep it as FD then the bank gives us 5-6% interest and they cut income tax 10-15% from here.  And on the other hand banks provide loans to customers and charge interest ranging from 8-15%. And the bank deducts annual maintenance charges, debit/visa/master/credit card charges, sms charges and other charges from us. Banks are just being a middleman, doing business of billions of dollars yearly

Banks have lots of money through this method, more like compound interest. They build estates and businesses with people's money and live in well furnished houses while their cash cow stays in a bad neighborhood. Banks have nothing to lose in compound interest, but customers suffer inflation from the money invested on compound interest. Money invested into compound interest 20 years ago yields huge profits now, but when the buying power is converted, the customer is left with no profit; due to inflation. Even the money lent to business owners open's door to collateral, which they get if the business or person doesn't pay their debts. It's a platform with lots of properties gained through customer's money. I've heard of people who are not able to claim their father's money from the bank, what happens to the deceased person's money?

[Newlifebtc]

We can paint banks all we want but the honest truth is that we can not do without fiat. The aim of every established business is definitely to make profit. We all know that banks are strictly out for business and of course they are here to make profits. This is post is centered on negative aspects of banking forgetting the positive side. In as far as I support the BTC, banks should not be dent as if they are ripping people of their hard earned money.

when we are making a reference of Banks we know that banks of today and the bank of incoming have the same thing in mind and what they have in mind is business, I believe that there is no agitation we can cause today that will make Fiat currency not to be into existence and provided that Fiat currency exist bank will always exist

[Sir Legend]

The bank system is designed not to benefit consumers, for example if we want a manual transfer it will take a long process. It's natural that nowadays most people prefer cryptocurrencies because full control is in their hands without the need for third party services.

[dezoel]

I think pretty much all of us already know that banks are businesses and they generate revenue for what they do for the community, which is to keep their money or let them spend or transfer them. All their models, services, and offers are in some way monetized for themselves and whenever we use any of their services, ATMs are a big example for that of their frequent usage, they earn money from that.

I've always thought about how much money banks make only by the ATM fees when you use an ATM of a different bank to withdraw your money. Imagine how many people use the ATMs per day, and per month. And that is only one of their products, they have a lot.

[southerngentuk]

Well the description is a bit rough but very realistic when it comes to these things, I agree that banking is a place that helps society and serves people. But in fact, the benefits they get are much larger, thinking about the above relationship I think this is normal, because simply large banking groups accept more risks when working. Intermediaries help people have a stable control or distribution of the economy. I'm not denying that risk issues arise because it's not 100% avoidable either, and that's why many other financial channels emerge.