Q:

How are mathematics used in banking?

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Quick Answer

In addition to counting money, mathematics is used in banking to assess the potential risks and gains of various banking products, according to the Mathematical Association of America. A banker recommending savings or investment products needs the ability to evaluate interest yields on different products, for instance.

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Full Answer

Actuarial science is financial risk assessment in industries in which companies must make precise decisions on risk-reward investments. Professional actuaries use statistical models and math skills to make recommendations to banks on what to do with money, according to the Society of Actuaries and Casualty Actuarial Society. This scientific or mathematical approach to decision-making leaves out the guess work and ensures that companies have a reasonable expectation of a high return and low risk before making business or finance decisions.

Bank tellers, who work on the front lines of a banking service, use basic math skills on a daily basis when helping customers with simple transactions, according to Chron. When customers make cash deposits, the teller counts the money to ensure accuracy with the amount noted on the deposit slip. When paying out cash disbursements, tellers also count the money for accuracy. Head tellers also use math when errors or disputes occur and transactions must be analyzed to identify the error.

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