Modern Banking And Strategic Portfolio Management

Reza G Hamzaee,Bob Hughs

doi:10.19030/jber.v4i11.2718

Abstract

In this research, an analysis of modern banking in a competitive environment is provided.&nbsp; Modern banking operations would involve dynamic strategic planning, in which a clear mission is declared, various strategies are formulated, and certain objectives and goals are placed in order. &nbsp;The banking industry in various countries has gone through some evolution.&nbsp; The growing competitive conditions, both inside and outside the industry, have influenced the banks&rsquo; investment in diverse assets and adoption of various forms of liabilities, which will be discussed here.&nbsp; Risk analysis, risk management, and operations under uncertainties would put a bank&rsquo;s survival and/or failure under a critical observation.&nbsp; This research provides a practical manual on bank investment under uncertain conditions, in which various kinds of risk are involved.&nbsp; While a competitive treatment of customers has always been of a critical significance to financial stability of banks, appropriate strategic decisions on investment choices and techniques have distinguished the thriving from the struggling banks.&nbsp; Among those alternative investment choices, one may clearly find the investment practices under varying interest-rate conditions of prime significance.&nbsp; The influence of cyber-technology on banks&rsquo; services, policy making, forms of money &amp; credit, including, e-money, electronic payments, digital cash, smart cards, online banking, etc., has attracted special attention by all the stakeholders.&nbsp; The authors will address the following three questions: 1. What portfolio structure in a variable interest-rate environment is proven to be most profitable?&nbsp; 2. What are the most appropriate products that modern banks must provide to their customers? 3.&nbsp; How is the task of risk management implemented by some successful banks?

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