1. Industry Analysis

2. Commercial Banking Industry
A commercial bank is a type of bank that provides services such as accepting deposits, making business loans, and offering basic investment products.
(Primary) SIC Code: 6021 – National Commercial Banks
NAICS Code:  – Commercial Banking

3. Overview
A bank is a financial institution that provides banking and other financial services to their customers.
Commercial banks take deposits from individual and institutional customers, which they then use to extend credit to other customers. They make money by earning more in interest from borrowers than they pay in interest to those whose deposits they accept.
They're different from investment banks and brokerages in that those kinds of institutions focus on underwriting, selling, and trading corporate and municipal securities.
Over the past decade there has been an increasing convergence between the activities of investment and commercial banks, because of the deregulation of the financial sector. Today, some investment and commercial banking institutions compete directly in money market operations, private placements, project finance, bonds underwriting and financial advisory work.
Furthermore, the modern banking industry has brought greater business diversification. Some banks in the industrialized world are entering into investments, underwriting of securities, portfolio management and the insurance businesses. Taken together, these changes have made banks an even more important entity in the global business community.

4. Overview There are two major types of banks in North America:
Regional (and Thrift) Banks - These are the smaller financial institutions, which primarily focus on one geographical area within a country. In the U.S., there are six regions: Southeast, Northeast, Central, etc. Providing depository and lending services is the primary line of business for regional banks.
Major (Mega) Banks - While these banks might maintain local branches, their main scope is in financial centers like New York, where they get involved with international transactions and underwriting.

5. Overview Banking Segments
Corporate banking Treasury
Risk management Cards
Banking operations Depository
Asset management Retail Banking
Wealth management Investment Banking

6. Banking Regulations
Given the interconnectedness of the banking industry and the reliance that the national (and global) economy hold on banks, it is important for regulatory agencies to maintain control over the standardized practices of these institutions. 
Bank regulation in the United States is highly fragmented compared with other G10 countries, where most countries have only one bank regulator. In the U.S., banking is regulated at both the federal and state level.
The U.S. maintains separate securities, commodities, and insurance regulatory agencies—separate from the bank regulatory agencies—at the federal and state level. United States banking regulation addresses privacy, disclosure, fraud prevention, anti-money laundering, anti-terrorism, anti-usury lending, and the promotion of lending to lower-income populations. Some individual cities also enact their own financial regulation laws

7. Bank of America Founded in October 17, 1904 as Bank of Italy
Headquarters in Charlotte, North Carolina, United States
The largest financial services company in the world – after the acquisition of Merrill Lynch & Co., Inc. in 2008
Products: Consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, private equity, wealth management, credit cards etc.

8. Industry Outlook Key trends for 2015
The US banking industry is entering a new phase in its post-crisis journey, with a much sharper focus on boosting profitability.
Governance and Risk Management
In order to meet formal expectations set by the Federal Reserve Board (FRB) and the Office of the Comptroller of the Currency (OCC), banks must elevate their standards for governance and enterprise risk management to meet increased and more formal expectations. A comprehensive assessment of risk-management frameworks will benchmark the bank’s current structure and processes against regulatory standards and provide for the development of a well-defined remediation plan. 
Consumer Protection
The Consumer Financial Protection Bureau (CFPB) is expanding its oversight into non-bank activities such as residential mortgage (non-bank mortgage servicing), private education and payday markets. Although regulated banks are familiar with Compliance Management Systems, aggregating and reporting of customer product-level data, including customer compliant data analytics is a significant challenge for many institutions. To better manage their CMS, firms should assess and consider enhancing their compliance infrastructure.

9. Vendor Risk
Regulators continue to spotlight risks associated with bank oversight of third-party providers and cite weak vendor oversight when referencing violations of consumer-protection requirements. As a result, risk, compliance and audit programs at many banks may have to focus more attention on regulatory compliance when it comes to consumer protection rules and vendor information security requirements.
Resolution Planning
Substantial work continues to strengthen the resiliency of global banks and various resiliency-related rules will soon reach final form (e.g., GLAC, TILAC). 
Volcker Rule
As the Volcker Rule is written, most banks will need to support the compliance requirements beginning July 21, 2015, but the timeline and the requirements themselves are subject to change. Effects of the Volcker Rule on banks varies by asset size, but the core intent of the new role will require firms to enhance compliance monitoring capabilities and well as sophisticated data analysis tools.

10. Data Quality
Regulators will expect bank management to be able to aggregate and analyze data across the enterprise as effective enterprise-risk and performance data-reporting, aggregation capabilities, data collection, and management of risk/performance data are required under formalized guidance and final rules.
Credit Quality Concerns
Banks have begun loosening underwriting standards under pressure to improve margins, enhance earnings, and increase returns on the higher level of capital they are now required to hold. As a result, regulators are pressuring banks to enhance their ability to aggregate credit exposures across the firm, and leveraged lending is receiving heightened focus. The accuracy and effectiveness of a firm’s credit-grading process is also under and regulators want banks to fully understand the impact of credit exposures to their balance sheets.
Increased Cyber Threats
The volume and number of cyber-attacks in the financial services industry has increased exponentially, requiring firms to protect themselves by investing appropriately. Governance and accountability must be changed, what was historically an IT matter now extends horizontally across business, operations, technology, legal, communications, and other areas. The “KYC” (know your customer) ethic remains strong, but now “know your vendor”, “know your employee” and “know your data” are riding alongside KYC.

11. Liquidity Reserve Requirements
The final version of the Liquidity Coverage Ratio (LCR) rule requires firms to maintain enough high-quality liquid assets (HQLAs) to cover fully net stressed cash outflows over a 30 day period, the rule is significant as it establishes a standard definition of liquidity by specifying what constitutes HQLAs. Many firms are finding the new daily liquid assets calculation to be operationally intense, and institutions may pursue upgrades to address the requirements.
Anti-money laundering
The government continues to raise expectations on the industry’s ability to know its customers — and its own ability to find nefarious activity and impose sanctions. Complying with the law in both letter and spirit is a difficult task, and expectations continue to evolve.

12. One step ahead of cyber threats
Industry Development
One step ahead of cyber threats
More than 70% of industry leaders see cyber insecurity as a threat to their growth prospects. Key priorities include identifying and focusing resources on the ‘crown jewels’ most in need of protection and carrying out more frequent risk assessments to keep pace with the ever changing threats.

13. More than 90% of banking & capital markets CEOs are looking ahead to revenue growth over the coming three years.
Banking & capital markets CEOs identified technological advances as the trend that’s set to have the greatest impact on their businesses.
Nevertheless, the rapid shift in technology and associated customer expectations presents risks as well as opportunities. This includes opening the door to tech-enabled and data rich new entrants and putting even further pressure on often slow and unwieldy legacy systems within the banking & capital markets industry – nearly 60% of industry leaders see the speed of technological change as a threat to their growth prospects.

14. Consumer Data (Consumer & Business Banking Branch)

16. Deposits includes the results of consumer deposit activities which consist of a comprehensive range of products provided to consumers and small businesses. Bank of America deposit products include traditional savings accounts, money market savings accounts, CDs and IRAs, non-interest - and interest - bearing checking accounts, as well as investment accounts and products .
Net income for Deposits increased $724 million to $2.8 billion in 2014 driven by higher revenue and a decrease in non-interest expense.
Consumer Lending is one of the leading issuers of credit and debit cards to consumers and small businesses in the U.S. Bank of America products and services also include direct and indirect consumer loans such as automotive, marine, aircraft, recreational vehicle and consumer personal loans.
Net income for Consumer Lending decreased $275 million to $4.2 billion in 2014 primarily due to lower net interest income and higher non-interest expense, partially offset by lower provision for credit losses and higher non-interest income.

17. Direct Competitors

18. References