Chapter 3 - Distribution Channels & The Impact of Technology

Question 1

What are the three main banking distribution channels?

Answer 1

Automated Telling Machine

Automated Pay In Machine

Direct Banking - Telephone and Internet

Question 2

What is credit scoring?

Answer 2

An automated process whereby credit applications are considered using standardised questions.

The answers are marked on a credit scorecard.

Overall score determines whether or not the facility is approved.

Question 3

What is the scoring criteria for credit scoring?

Answer 3

Age

Occupation

Time at current address.

Home (owned outright, mortgaged, rental)

Income

Expenditure

Question 4

What are the different methods of money transmission?

Answer 4

Cash

Cheques

Bank Giro Credits

Standing Orders

Direct Debits

Faster Payments

Credit Cards

Debit Cards

ATMs

Direct banking - telephone or internet

Question 5

What are the three types of customer that the bank should consider when drawing up a customer retention strategy?

Answer 5

Ideal Customers - Stay with the bank longer and more likely to spend money.

Silent Attrition - Reduce or stop using a product but leave account open. Don’t tend to complain.

Unhappy Customers - Customers that have complained or are not happy with the product or service they have received.