> ## Documentation Index
> Fetch the complete documentation index at: https://docs.lerian.studio/llms.txt
> Use this file to discover all available pages before exploring further.

# Midaz in banking

> Discover how Midaz powers retail, corporate, and personalized banking through Portfolios, Segments, and dedicated settlement Accounts.

export const GChildAccount = ({children}) => <Tooltip headline="Child account" tip="A sub-account under a parent account, used for budgeting or organizational purposes — each tracks its own balance while rolling up to the parent." cta="See glossary" href="/en/glossary">
    {children}
  </Tooltip>;

export const GAsset = ({children}) => <Tooltip headline="Asset" tip="A unit of value tracked in the ledger — traditional currencies (BRL, USD), digital currencies (BTC), or custom units like loyalty points. Every account is linked to exactly one asset." cta="See glossary" href="/en/glossary">
    {children}
  </Tooltip>;

export const GSettlement = ({children}) => <Tooltip headline="Settlement" tip="The process of finalizing a financial transaction — transferring actual funds between institutions. Settlement accounts act as clearing points where money is held temporarily before reaching its final destination." cta="See glossary" href="/en/glossary">
    {children}
  </Tooltip>;

export const GSegment = ({children}) => <Tooltip headline="Segment" tip="A classification applied to accounts that share characteristics — like customer tiers (VIP, Student) or regional divisions — enabling differentiated rules and pricing." cta="See glossary" href="/en/glossary">
    {children}
  </Tooltip>;

export const GPortfolio = ({children}) => <Tooltip headline="Portfolio" tip="A grouping of accounts belonging to the same customer, business unit, or purpose — tying together checking, savings, and investment accounts for a unified view." cta="See glossary" href="/en/glossary">
    {children}
  </Tooltip>;

export const GLedger = ({children}) => <Tooltip headline="Ledger" tip="The core financial book that records all transactions, balances, and operations for an organization — the single source of truth for a business unit's finances." cta="See glossary" href="/en/glossary">
    {children}
  </Tooltip>;

Midaz supports three banking models: **retail banking**, **corporate banking**, and **personalized banking services**. It uses <GPortfolio>portfolios</GPortfolio> and <GSegment>segments</GSegment> to model each one.

## What changes with Midaz

***

| Without Midaz                                                          | With Midaz                                                                                              |
| :--------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------------ |
| Customer accounts scattered across legacy systems with no unified view | Single <GLedger>ledger</GLedger> with portfolios grouping all accounts per customer                     |
| Adding new products (savings, credit) requires core system changes     | New account types and segments configured via API — no code changes to the ledger                       |
| Fee and interest tracking mixed with operational accounts              | Dedicated internal accounts for fee income, interest expense, and <GSettlement>settlement</GSettlement> |
| Segmentation (VIP, Student) enforced manually per product              | Segments classify accounts, and the Fees Engine waives fees for a whole segment                         |
| Corporate hierarchies require custom workarounds                       | Native <GChildAccount>child accounts</GChildAccount> and multi-portfolio support for subsidiaries       |

## Driving innovation in banking

***

Banks add products without changing core ledger structures. You configure new account types and segments through the API.

## Retail banking for individual customers

***

A retail bank runs on a single organization and a primary ledger. Each customer maps to a portfolio.

### Using Midaz

* **Organization & Ledger:** ABC Bank registers as an organization. It creates a "Retail Banking Ledger" for all customer transactions.
* **<GAsset>Assets</GAsset>:** The bank defines an asset for every currency it operates. This gives multi-currency support for domestic and international accounts.
* **Customer portfolios:** Each customer has a portfolio. It holds their checking, savings, and credit accounts.
* **Transactions:** Midaz records deposits, transfers, and payments with full traceability.
* **Internal accounts:** Fee and interest accounts track the bank's revenue and expenses.
* **Segments for personalization:** You classify accounts into service tiers, such as Standard or Gold. The Fees Engine can waive fees for a tier.
* **<GChildAccount>Child accounts</GChildAccount> for budgeting:** Customers create sub-accounts inside their savings portfolio for better money management.

#### Example: ATM withdrawal

John Doe withdraws \$100 from an ATM:

<Steps>
  <Step title="Debit">
    \$100 from John’s checking account.
  </Step>

  <Step title="Credit">
    \$100 to an "ATM Cash Dispensed" internal account.
  </Step>

  <Step title="Fee">
    Midaz debits \$3 from John’s account and credits the Fee Income account.
  </Step>
</Steps>

Midaz handles millions of retail customers.

## Corporate banking for business and enterprise customers

***

Corporate banking needs a more detailed structure. It often uses separate ledgers or segments to keep it apart from retail banking.

### Using Midaz

* **Dedicated Ledger:** ABC Bank creates a "Corporate Banking Ledger" for business accounts.
* **Portfolios for enterprises:** Each corporate client, such as ACME Corp, gets a portfolio with accounts for operations, payroll, and taxes.
* **Hierarchical accounts:** Child accounts let a business split funds across departments and keep one consolidated balance.
* **Bulk transactions:** Midaz supports large operations, such as payroll with many simultaneous debits and credits.
* **Segments & Products:** You classify companies as SME or Large Enterprise to offer tailored services.
* **Multi-entity clients:** You give each subsidiary its own portfolio under the same organization.

#### Example: loan disbursement & supplier payments

ACME Corp receives a \$1,000,000 loan:

<Steps>
  <Step title="Credit">
    \$1,000,000 to ACME’s loan account.
  </Step>

  <Step title="Debit">
    \$1,000,000 from the bank’s Loans Receivable account.
  </Step>

  <Step title="ACME uses funds">
    * \$100,000 payment to a supplier at ABC Bank (internal transfer).
    * \$50,000 payment to an external supplier (external transfer recorded in the clearing account).
  </Step>
</Steps>

Midaz gives complete visibility into large operations.

## Portfolios and Segments for personalized services

***

Banks offer custom financial products. Midaz supports this through portfolios and segments.

### Customization strategies

* **Youth & student accounts:** You assign these accounts to a "Student" segment. The Fees Engine waives their fees.
* **Premium banking:** You group "Diamond" accounts in a premium segment. You apply fee rules to the whole segment.
* **Co-branded & special products:** You define loyalty points as an asset and track them in a customer's account.
* **Unified account views:** An application lists all accounts under a portfolio in one call.
* **Cross-portfolio operations:** A customer with a personal and a business portfolio transfers funds between them. The accounts stay separate in each portfolio.

#### Example: student account perks

<Steps>
  <Step>
    A new customer signs up as a student.
  </Step>

  <Step>
    You assign their account to the "Student" segment.
  </Step>

  <Step>
    The Fees Engine waives their monthly fees.
  </Step>

  <Step>
    When the customer reaches a set age, you move the account to a different segment.
  </Step>
</Steps>