3. OTHER BANKING SERVICES

Beside those services outlined above that have traditionally been offered by UK banks, recently UK banks have also been offering their customers the following additional services:

1. Foreign Exchange

Prior to end of the Second World War the UK did not effectively have in place any form of foreign currency control regulations. It didn’t need to – it was a major exporter of foreign exchange (“FX”).

However, after the Second World War this all changed, the United States had taken over the UK’s place as being the premier foreign currency exporter and strict currency control regulations were needed for a period of almost 35 years (1945 – 1980).

During this period UK banks either could not transacted in FX, or it simply wasn’t profitable to do so. Consequently, FX trading by UK banks was minimal.

However, all this was to change with the introduction of Thatcherism monetary policies in the early 1980s and suddenly it became extremely profitable for UK banks to be involved in FX transactions.

Consequently branches of UK banks began to offer FX services as wide and varied as simply changing money and notes to far more complex bills of exchange and bills of lading.

Although still comparatively small, FX is now considered a major revenue earner for domestic UK banks; with different banks offering different services to its customers, some more comprehensive and complex than others. That said, most high street banks in the UK tend to offer straightforward currency exchange services.

2. Insurance

Insurance products being offered by UK banks today probably accounts for the biggest profit growth in UK banking in the last 25 years (outside of possibly mortgage lending)! Nearly all UK banks today either offer their own insurance products or have aligned themselves with a major insurance provider – an example: Royal Bank of Scotland and Direct Line.

The types of insurance products offered by UK banks include

(i) car insurance;

(ii) life insurance;

(iii) accident insurance;

(iv) holiday insurance;

(v) home contents insurance;

(vi) home insurance (note, this is not the same as a home contents insurance.

In the case of the later, you are insuring the home and its fixtures. In the case of the former you are insuring the valuables inside the home); and

(vii) credit insurance – a sort of insurance policy you take out when you have outstanding borrowings in case you become unemployed or sick, in which case the insurance company pays your premiums until such time as you find a new job or get better.

…And Finally

One final note, with regard to all of the above products, worth pointing out is that most, if not all of these services, are offered to both individual accountholders and business accountholders.

It is also possible to open a hybrid personal / business bank account, which is commonly known as a “trading as” or “T/A” account.

In the event that you are interested in operating a personal, business, or T/A account, and would like more information on any of the above products, please feel free to select the relevant page on this site.

 

Useful Related Sites:

UK Bank of England - Information on UK Banking from the Bank of England

UK Trade and Investment Authority - the Government organisation that supports companies in the UK doing business internationally and overseas.

Foreign Exchange Trading Information - wikipedia explanation