Module 1 Glossary - Banks and banking Flashcards
Asset
A resource that has value, or which can be sold for money
Building society
Mutual business that mainly provides loans for house purchases
Buffer
A pot of money set aside by a bank from its capital and held in reserve to absorb bad debts
Business banking
Providing financial services to small and medium sized enterprises
Capital
A banks own funds which are available to meet losses
Challenger bank
A retail bank that has been recently formed or is relatively new in the retail banking sector
Chatbot
A computer programme that simulates conversation with human users
Cheque
A form of written instructions to a bank to make a payment from a drawer to a payee
Cloud computing
The delivery of computing services (such as storage, software, networks) over the internet
Commercial bank
A bank that serves personal, business and corporate customers
Conversational user interface
A facility that allows a customer/ user to have a conversation with a computer system
Co-operative bank
Bank that are owned by members and which provide deposit-taking and loan products to personal customers and small businesses
Corporate banking
Banking services provided to large companies
Credit
An arrangement allowing a purchaser to pay for goods and services at a later date
Credit union
Non-profit co-operative organisations owned by members who pool savings and lend to each other
Creditor
A person/organisation that is owned money by a third party
Cryptocurrency
A currently that only exists in the digital realm, and is created and managed through blockchain technology
Current account
A bank that allows deposits and withdrawals without notice
Cybercrime
Crime committed on a computer or over a computer or internet network
Debtor
A person/ organisation who owes money to a third party
Deposit
An amount of money paid into a bank or other financial account
Digital only bank
A bank that has no physical branches and delivers banking services via digital banking
Digital technology
Electronic tools, services and systems that can generate, create, store or process data.
Digital wallet
A secure finance application on a digital device that stores money and can make payments (also e-wallet)
Disintermediation
The process in which parties transacting in financial products deal directly with each other instead of using a bank or other third party as an intermediary.
E-commerce
‘Electronic’ commerce, involving trading of money, goods, or services on the internet.
Equity market
A trading platform/ market for the buying and selling of shares
Finance house
A corporate entity that provides instalment credit to individuals and businesses.
Financial intermediation
The process by which money deposited in a bank is lent by the bank to those who want to borrow money.
Fintech
A term combining finance and technology. Also referred to digital finance.
Fractional reserve banking
The process in which banks lend out a certain proportion of the deposits that they hold.
Foreign currency market
A regulated global exchange market that determines the exchange rate of foreign currencies.
High net worth individual
People who earn a large income or have significant assets.
Intermediary
A person/party who acts to fail at arrangements between people or parties who cannot deal directly with each other.
Interest
The price paid for borrowing money. It is expressed as a percentage rate over a period of time.
Insurance
A financial product that is sold to provide protection against loss, damage or theft.
International banking
Services that are provided across national borders and engage in activities that use different currencies
Investment banking
The provision of financial services to large corporates, pension funds and governments
Islamic banking
Services that do not charge or pay interest in compliance with Islamic sharia law
Liabilities
A company’s/person debts or obligations
Liquidity
The ability to turn an asset into cash or near-cash l, quickly and easily without significant loss of value
Loans
An agreement that allows a person or entity to borrow a sum of money which will be paid back typically in instalments usually with interest
Machine learning
A computer programme that is able to learn from data, to help it identify patterns or make decisions
Merchant payments
A payment service offers by a service provider that allows customers to process payments for good or services through a merchant.
Micro business
Very small business
Turnover of £632,00 or less
10 employees or less
Have less than £316,000 on balance sheet
Money supply
The total of all the currency and other liquid assets in a country’s economy at any point in time
Mortgage
A long term loan used to finance the purchase of a house or property
P2P lending
Peer to peer lending (social)
Lending directly to each other through an online platform
Pensions
Income paid to someone who no longer works because of their age or for health reason
Philanthropy
Donations or actions that are intended to benefit broader society
Portfolio
A collection of assets, investments or holdings
Private banking
Services provided to wealthy customers or high net worth individuals
Private sector
Not under direct state control
Profit margin
The difference between the cost of producing and selling an item or service, and the price the item or service is sold for
Public listing (publicly listed)
A company that had shares which are traded (listed) on the stock market
Screening
Identifying potential risk characteristics
SMEs (small and medium sized enterprises)
relatively small business, any organisation fewer than 250 employees
Social lending
Lenders and borrowers dealing directly with each other, without going through a bank or other financial intermediary
Stakeholder
Have an interest in an entity
Subsidiaries
Company that is controlled by another company (known as ‘parent’ or ‘holding’ company)
Unicorn
Technology company valued at more than $1 billion
Wearable
Digitally connected devices that are worn on your body (e.g. Apple Watch)
Bank
Authorised or licensed by a government or regulatory body to engage in banking activities (making loans, accepting deposits, clear cheques)
