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CBI > Unit 3 - Bank Customers > Flashcards

Unit 3 - Bank Customers Flashcards

1
Q

What is a firm that holds and administers property or assets for the benefit of a third party?

A

Trustee

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2
Q

What is the financial product that would be the most suitable for a company which needs to boost its liquidity position?

A

Overdraft

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3
Q

Optichannel banking is a type of distribution channel which is a:

A

tailored approach which determines the best number of channels for each customer

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4
Q

What is not correct about basic bank accounts?

A

Most customers begin with a basic account before moving to a current account.

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5
Q

What is the training tool to help a banks frontline staff to manage initial conversations with vulnerable customers?

A

TEXAS

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6
Q

What are types of customers?

A

Personal customers, Sole traders, Partnerships, Ltd Companies, Clubs, associations and societies, Trustees

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7
Q

What is core banking services?

A

Accept deposits from savers, grant loans to borrowers, act as an agent for payments, providing other financial products & services including insurances & financial advice

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8
Q

What are green products & services?

A

Green mortgages-energy efficient homes
Green loans- e.g. purchase of low carbon emission car
Green bonds- funds used to fund environmentally friendly projects

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9
Q

What does the Consumer Credit Act 2006 cover?

A

-Information to customers before agreement
-Additional protection for credit card purchases between £100 & £30,000
- Procedures for default, termination
- Method of calculating APR

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10
Q

What is a Credit Score?

A

It’s a 3 digit number used by lenders to assess how likely a borrower is to repay the debt- higher the score, the less risky a borrower is

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11
Q

What is FICO score?

A

Standard measure used: based on 5 categories:
1. Payment history
2. Amounts owed
3. Length of credit history
4. New credit
5. Credit mix

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12
Q

What is a bank current account?

A

Is normally used regularly, and it is the main account that customers use to manage their money.

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13
Q

What are deposit services & products?

A

Available to people who need to manage their day to day incomes & expenditures & who want to save their surplus funds.
- Main products:
1. Current accounts
2. Savings Accounts
3. Investment accounts

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14
Q

Case study- March 2023 what bank offers 4 current account products?

A

Lloyds Bank- 1 is basic & other 3 are “high class accounts”: designed for people with income above a certain threshold & require a certain amount of £ to be paid in each month
1. Classic
2. Club Lloyds
3. Silver account
4. Platinum

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15
Q

What is the maximum amount that a customer can invest in an ISA each year is (2021/22 tax year)

A

£20,000

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16
Q

An equity release loan would be most suitable for a customer who wants to:

A

Raise money by freeing up some of the capital that is locked into their property

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17
Q

Level Term assurance can be useful for a customer who is wants to:

A

Provide security for dependants up to a certain age if the customer dies during the term of the policy

18
Q

1 way of empathising with a customer is by:

A

Saying ‘ that must have been really frustrating for you’

19
Q

If a complaint is not resolved between a bank and its customer, the customer may be entitled to refer the complaint to which regulatory body:

A

FOS ( Financial Ombudsman Service)

20
Q

What are examples of vulnerable customers?

A
  1. Low income/debt
  2. Severe/long term illness
  3. Low literacy, numeracy & financial capability skills
21
Q

In terms of supporting vulnerable customers, what option has been found to be the most effective method in helping them?

A

Sign posting to charitable organisations that can help them

22
Q

Having financial capability is NOT:

A

About becoming a financial expert & passing exams

23
Q

What does ISA stand for?

A

Individual Savings Account

24
Q

An Islamic mortgage is a mortgage that is compliant with Shariah law. Shariah mortgages are typically referred to as:

A

Home purchase plans

25
Q

Investment products include various securities-related products, such as mutual funds. These are also known as:

A

Unit Trusts

26
Q

EY (2018) suggests a way of segmenting customers in terms of how they feel about new technologies which could have implications for the way they perceive their banking experience. Which is NOT 1 of the 8 categories of customers?

A

Burdensome & Proud

27
Q

According to research cited in UK newspaper The Times in June 2019. In the 7 years between 2012 & 2019, how many high street branches in the UK were closed?

A

2145

28
Q

If a customer pays in a cheque at a Post Office, the cheque clearing timescale will increase by at least 1 additional day. This is because:

A

The Post Office is not a bank & it has to send the cheque to the customers bank before it can be entered into the clearing system.

29
Q

Using images of cheques instead of handling the physical cheques significantly speeds up the cheque clearing process. With a paper-based system, how many days for a cheque to clear?

A

6 weekdays ( excluding bank holidays)

30
Q

What is a standing order?

A

An instruction we give to our bank to authorise a payment for a set amount usually on a regular basis to be made to another bank

31
Q

What’s the benefit of Private Ltd Companies?

A

Many SMEs are PLC as it’s a separate legal entity from its shareholders ie if cust takes legal action against the business its only company itself

32
Q

What type of companies are Corporates?

A

Large ltd companies ie Public Ltd and they can offer shares to the public

33
Q

What are 3 main types of lending products?

A
  1. Credit cards 2. Personal loans 3. Mortgages
34
Q

What are most personal lending regulated under?

A

Products in uk and eu are regulated under the consumer credit regulation

35
Q

What’s the rule on Islamic mortgages?

A

Shariah law prohibits the payment of riba/interest. Islamic banks have to develop products that don’t charge interest.

36
Q

How many types of Islamic mortgages are there?

A

3 ( Ijara, Musharaka, Murabaha )

37
Q

What is Ijara ( lease, 1 of Islamic Mortgages) ?

A

The bank buys property & leases to client for fixed term @ agreed monthly cost; when term is up the bank transfers full ownership to client.

38
Q

What is Musharaka(partnership, 1 of Islamic mortgages?

A

Co-ownership agreement where cust &bank each owns a share of property. Each time cust makes repayment (part capital/rent) they’re buying more banks share which reduces rent and at end the customer owns bank shares.

39
Q

What is Murabaha(profit, 1 of Islamic mortgages)?

A

Bank buys property on behalf of customer & sells it to them for a higher price than it paid, repaid by cust in equal instalments over fixed term

40
Q

What are examples of green products/services?

A
  1. Green mortgages- cust buying energy efficient homes.
  2. Green loans- personal banking cust to buy electric cars etc.
  3. Green business loans to help corporate cust for low carbon projects
  4. Green bonds, investment to fund clear water etc
41
Q

Who ensures banks are not mis-selling & to comply with regulations?

A

The Financial Conduct Authority

CBI (7 decks)

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