To fully understand the differences between banks and other financial institutions, let us first discuss the meaning of financial institution. You can think of this term as an umbrella that encompasses many companies and organizations, including banks. In general, financial institutions can be divided into two groups: non-bank financial institutions and bank financial institutions. The first group consists of various institutions, including leasing companies, investment banks, financial companies and insurance companies. Bank financial institutions, on the other hand, include banks whose main purpose is to make loans and take deposits. We can take a closer look at both categories.

Banks financial institutions
Banks, more specifically – private or commercial banks, fall under the category of bank financial institutions. A bank is a financial intermediary with the purpose of acting as a middleman between providers of funds or depositors and borrowers. A bank's main job is to take deposits and later use those funds to offer credit to its customers. Another obligation of a bank is to act as a payment agent, which it does by offering a variety of payment services such as credit and debit cards, direct deposit facilities, checks, and cashier's drafts. A bank makes money by investing deposits in securities and assets, but primarily by on-lending the funds to its customers. The main reasons for depositing money in banks are convenience, safety and interest income.

Bon-bank financial institutions
The other type of financial institutions includes investment banks, insurance companies, mutual funds, and others. A number of financial services provided by non-bank financial institutions differ from those provided by a bank. The main difference between the two is that non-bank financial institutions cannot accept deposits into savings and money market accounts while this is one of the core businesses of bank financial institutions.

They now offer a variety of other services. For example, investment banks provide services to their clients such as underwriting of debt and equity offerings, corporate advisory services, securities trading and derivatives transactions, and other investment services. Insurance companies offer protection against certain types of damage in return for an insurance premium. Pension funds and investment funds are savings institutions where investors can invest their money in collective investment vehicles. There are financial services provided by both banks and non-banks, such as B. providing credit, financial advice, leasing equipment and investing in securities.

Examples of non-bank financial institutions
Breder Suasso is a non-bank financial institution whose core business is to offer its customers fast and secure cross-border payments by opening a multi-currency account (which does not require a face-to-face meeting). Other services include internationally accepted debit cards and financial advice for corporate and individual clients. The company's main selling points are confidentiality, security and convenience in cross-border payments.

PaySera is a Lithuania-based non-bank financial institution that offers a free multi-currency account and the ability to transfer funds to 10,000+ banks in 180+ countries around the world in less than 30 minutes. In addition, in cooperation with more than 5000 e-shops, the company offers Paysera Checkout payment method for faster transfer and chargeback of up to 1% of spent money. The company's main selling points are a fast and accessible e-environment, 24/7 service and top-level security.