Please enable JavaScript.
Coggle requires JavaScript to display documents.
Topic 7 - Coggle Diagram
Topic 7
Banks:
Usually public limited companies that sell a wide range of financial products and services to businesses as well as to individual costumers.It offers products that enables people to:
- Make transactions (e.g: cash cards, debit cards, cheques...)
- Save (e.g: saving accounts and bonds)
- Invest (e.g: buying stocks or shares)
- Borrow (such as overdrafts, personal loans, credit cards and mortgages)
- Protect themselves (contents insurance and life insurance)
They raise money to fund their operations by selling shares. The people who buy shares are called shareholders and they own a part or share of the organization.
Advantages:
- Buying products from a large bank is that the costumers have easy access to different products and services.
- The size of the bank means it can afford to invest in new products and services.
Disadvantages:
- Dealing with a large bank is that costumer service may be less efficient than in smaller organizations.
Building societies:
Mutual organizations owned by their costumers who are called members.
They offer a wide range of other financial products, including current accounts, credit cards and insurance.
Advantages:
- All costumers are members who have a say in how the society is run, meaning they can vote on key issues and attend and speak at annual meetings.
- The costumer service offered also tends to score more than a service offered by banks.
Disadvantages:
- They are unlikely to be able to spend the same amounts of money on research and development as large banks can, and also rely on partners to offer members at certain services such as insurance policies
-
Credit unions:
Similar to building societies because they are also mutual organizations owned and run by the individuals who are their members.The key difference between a credit union and a building society is that the majority of a credit union's members must share a common bond, which means that they all must:
- live and work in a certain area like Bristol
- work for a specific employer, for example a local authority
- work in a particular industry
- belong to a specific organization
They offer 2 main products, savings and loans, and another wide range of other products including:
- life assurance
- the Credit Union Current Account with cash or debit card
- a pre-paid payment card
-
Disadvantages:
- Highly limited product range due to their size
Advantages:
- Lower operating costs than other providers
- Profits are generated and used for the members' benefits, not external shareholders
- Provide a local community-focused service
- They inspire costumer loyalty through the common bond
Branches:
- Costumers can go in and talk to someone in person
- Branch staff offers a personal service
- The branch can advertise all its products
- It is not convenient to visit them as they are open when most people are at work
- Expensive to run for a provider
Online banking
- 24/7 access
- Carries out banking transactions immediately
- Research products and use online tools to make calculations (such as likely repayments and loans
- Applies for products online
- Cheap to run for a provider compared to branches
- Security issues
- Lack of personal contact
Telephone
- Costumers can contact their bank from wherever they are
- The call center often has longer opening hours than branches
- Call centers are less expensive than branches for the providers to operate
- Costumers can ask any questions to clarify
- Costumers can access specialist advice
- Potential fraud
- Lack of quality of costumer service
Mobile banking
- Quick and convenient for both costumers and providers
- Requires sophisticated security to ensure data remains safe
Post
- Delivers a physical message that costumers can spend time considering to keep for future reference
- Providers can use statement inserts and mail shots to advertise their products to existing and potential costumers
- Convenient method for costumers who need to return a signed contract or to supply other paperwork
- It takes a lot of time for information and there's risk of documents being lost in transit
National Savings and Investments:
Executive agency of the Chancellor of the Exchequer.
The savings and investments provide funds to the exchequer and it changed from a government department to an executive agency.