Topic 7 - Providers

Question 1

What are the main providers?

Answer 1

Banks
Post offices
Building societies
Credit unions
National savings and Investments

Question 2

Banks

Answer 2

Usually publicly limited companies that sell a wide range of financial products and offer services to businesses as well as individuals.

Question 3

What do the products and services that the bank offers enable people to do?

Answer 3

Make transactions
Save
Invest
Borrow and protect themselves

Question 4

What are the advantages of banks?

Answer 4

Customers have easy access to different products and services
The size of the bank means it can afford to invest in new products and services

Question 5

what are the disadvantages of banks?

Answer 5

Customer services may be less efficient than in smaller organisations

Question 6

What are building societies?

Answer 6

Mutual organisations owned by their customers who are called members

Question 7

What were building societies set up to offer?

Answer 7

Savings accounts and mortgages

Question 8

What do building societies now provide?

Answer 8

A wide range of financial products such as current accounts, credit cards and insurance.

Question 9

What are the advantages of building societies?

Answer 9

All members have a say as to how the society is run (They can vote on key issues and attend meetings)
They do not have shareholders and therefore do not need to pay dividend from their profits

Question 10

What are the disadvantages of building societies?

Answer 10

They are unlikely to be able to spend the same amount on research and development as large banks can

Question 11

Why are building societies smaller than banks?

Answer 11

They tend to operate within the UK only and often have quite a local focus
Legal restrictions are placed on their business activities
Restrictions on the amount of unsecured loans that building societies make