Unit 3 Flashcards
Small and medium sized enterprises
Turnover up to 6.5 million
Sole trader- self employed / separate business bank account
Partnership- 2 or more People who make a formal arrangement to operate a firm and share any profit
They both have access to bank accounts
Private limited companies - separate legal entity to its share holders
Legal action against the company and not the share holder.
They cannot offer its shares for sale to general public which means they cannot grow
Own bank account
Corporate banks
Large limited companies - sale shares to public
Very large and extranal share holders
Larger loans to invest in new equipment etc
Charities- chars vital under the law
Not profit making
Community groups - sport / leisure
Trustees - - manages property and assets for the benefit of a third party. Each trust needs a current account they may need a saving/ investment: loan and insurance
Current account
Deposit -money paid into their account
Withdrawal- when purchasing goods
First banking product
Credit checking process - how customer used current account as part of checking process
Investment products
Bonds - loan made to a gov or a company. Fixed term. Investor can buy up to a maximum number the longer the term of the bond the higher the interest. Some bonds do not allowed withdrawals until the end of the period.
Mortgages
Secured loan
Repossess the property if they don’t pay the money
The banks risk is low
Interest rate for mortgages is low as it is low risk
Remortgage
During the term of mortgage to take advantage of the better rates, they must have sufficient equity.
Equity is the value of the property over and above the mortgage and which belongs to the property owner
Building extension
Considering montage application
Size of the loan compared to borrowers income
How much the property cost compared to what’s being borrowed
The term
Interest rates
Islamic mortgage - Ijara (lease)
The bank purchases the property and leases it to the customer for a fixed term- agreed monthly cost. When the term end the customer gets the property
2 Islamic mortgage - Musharaka( partnership)
Co ownership agreement
The customer and bank has owenershop over the property- each time the customer pays its capital and rent they are buying more of the banks share- the customers rent reduces the ownership grows
3 Murabaha (profit)
The bank buys the property on the customer behalf and then sells it to the customers for a higher price than it paid. The higher price is repaid by the customer in equal instalments over a fixed term.
Green product
Green mortgage
Buying an energy efficient home
Green loan for personal banking customers to make environmentally friendly purchases electric cars
Low carbon projects and investment
Green bonds - fund environmentally friendly investments
Multi Channel
Is transaction based - operates separately
Problem not captured in another channel
Omni channel
Allows customers to interact with their banks across multiple channels. Interaction based
Using one channel is reported in another channel.
More personalised service
Two way relationship
Wants and likes through analytics
Disadvantage-Cannot be satisfy all their needs through one channel
Optichannel -
Channels that best suit them
The best number of channels for each customer
Personalised customer communication
Information given of what they need
Using AI
Financial exclusion
76% of the world of adult population have a bank account, it dropped to 71% in developing countries
The unemployment : 11%
Adults with no education : 7%
Gig economy 7%
Digitally excluded 7%
The world bank 2001
A vulnerable customer is someone who, due to their personal circumstances, is especially susceptibly to harm, particularly when a first is not acting with appropriate levels of care
