Section B Flashcards
What is the definition of a financial institution?
A company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments and current exchange.
Types of financial institutions?
Bank of England, banks, building societies, credit unions, national savings and investments, insurance companies, pension companies,pawnbrokers, payday loans.
What does the Bank of England do?
UK’s central bank that ensures the financial stability of the UK. It doesn’t lend to the general public.
What do banks do?
A bank handles financial transactions and stores money on behalf of the general public. They allow individuals and businesses to make payments, access credit and save.
What are building societies?
Similar to banks these provide financial services to the public such as day to day banking, mortgages, and credit
What are credit unions?
A member owned financial cooperative, controlled by its members and operated on the principal of people helping people, providing its members credit at competitive rates as well as over financial services.
What do the national savings and investments do?
A government backed organisation that offers a secure savings options.it offers a range of options including ISA, premium bonds and gilts.
What do insurance companies do?
These are businesses that protect people against loss in return for a monthly premium.
What do pension companies do?
They sell policies to individuals or companies that enable themselves or their employees to save for future retirement. Pension companies usually invest the money deposited by the individual in hopes of growing it for future use.
What do pawnbrokers do?
Loan money to individuals and secure this loan against an asset. The most well known asset that is pawned as jewellery. If an item isn’t bought back then the pawnbroker will sell the asset to recoup the cost of the loan.
What are pay day loans?
Short term loans that are intended to bridge the gap between one payday to another in the case of an emergency. They have extremely high interest rates.
What are the methods of communicating with customers?
Branch, online banking, telephone banking, mobile banking, postal banking.
Who are the FCA (financial conduct authority)
They are an independent organisation that is the conduct regulator for 59,000 financial service firms and financial markets in the UK.
What are the 3 areas that the FCA focus on?
Authorisation, supervision, and enforcement.
Who are the FOS (financial ombudsman service)?
Appointed by the government to protect and represent consumers who are in disputes with financial service providers.
