banking

Banking refers to the business of accepting deposits and making loans, as well as providing related financial services to individuals, businesses, and governments. Banks act as financial intermediaries, channeling funds from savers to borrowers and facilitating payments and risk management. The term covers a range of institutions and activities, from retail banks that serve the general public to more specialized firms.

Commercial banks accept deposits, offer checking and savings accounts, and originate loans for homes, vehicles, and business needs. Retail banks serve individuals; merchant or investment banks focus on capital markets and advisory services. Central banks, while separate from commercial banks, manage monetary policy, issue currency, supervise the banking system, and act as lenders of last resort.

Common banking services include payment processing, money transfers, foreign exchange, wealth management, safekeeping of assets, and custody services. Banks also provide credit facilities, such as mortgages, business loans, and credit lines, and may offer deposit insurance protection to reduce risk for customers in some jurisdictions.

Banking is heavily regulated to ensure safety and stability. Licensing by regulators, capital adequacy requirements, liquidity standards, and consumer protection rules aim to preserve solvency and manage systemic risk. In many countries, central banks or supervisory agencies oversee banks and implement monetary and financial-stability policies.

Technological change has transformed banking through online and mobile channels, automated underwriting, and fintech partnerships. While digital banking increases accessibility and efficiency, it also raises cybersecurity and fraud risks.

Historically, banking evolved from moneylenders and merchant banks to modern regulated institutions that mobilize savings, support investment, and underpin payment systems.