BANKING Banking today Technological developments ATM E-banking M-banking As a consequence, many banks have changed the way they operate: a lot of “back office” operations have been centralized and branches have been cut.

ATM (automatic teller machine) It allows customers to do their banking 24 hours a day in many public spaces different to banks. The customer has got a plastic ATM card with a magnetic stripe and a microchip, which is part of the security system as well as a PIN (personal identification number), the code you have to digit to carry out the financial transactions you need (usually cash withdrawals, account balance checking). E-banking It allows customers to do their banking from home; It is more convenient and flexible than traditional methods of banking. It can be cheaper: it cuts the costs of the operations. Interest rates are often higher. It is the fastest growing Internet activity with 44% of those who use the web who also carry out their banking activities on-line. M-banking It allows customers to do their banking wherever they are, whenever they want, by using their mobile phone. It’s fast and cheap, as mobiles are less expensive than computers and they are very easy to use. It is a spreading method all over the world at the moment.

Internet banking in Europe It is more convenient and flexible than traditional methods of banking. It can be cheaper: it cuts the costs of the operations. Interest rates are often higher. Primary banking channels 15% ATMs, M-banking 24% E-banking 61% Branch

Phishing On line banking CAN be vulnerable to fraud; but E-banking can become less secure if users are careless, naive or computer illiterate. This is called PHISHING, when someone is able to gain access to someone else’s on-line sensitive information and bank account, usually pretending to be a trustworthy organization (but also in other more subtle and hidden ways). However, increasing studies are being carried out to avoid phishing.

Microcredit It is a small loan (microloan) granted to unemployed people, usually poor entrepreneurs who want to set up a self-employment project but lack the money. Microcredit originated in developing countries, where people coudn’t meet any of the usual requirements a bank would normally ask for. The Grameen Bank In 1976, Muhammad Yunus, a US economist from Bangladesh founded the first bank to develop a system of credit for the poor, and invented microcredit. The bank, set up in Bangladesh, would help million of borrowers (96% women) with tiny loans. To ensure the repayment, the bank used a system of “solidarity groups” that met regularly with the bank representatives. Now it offers housing loans as well as other bigger projects, and the usual banking services as savings. In 2006, Mr Yunus and his bank were honoured the Nobel Peace Prize.

Banking services to business Businesses use banks to keep their money and use it quickly. Businesses also need finance: To set up the business or expand it; To modernise it, or start new ventures; To support their activity and even to survive in difficult trading periods.

Banking services to business Businesses use banks to keep their money and use it quickly. CURRENT ACCOUNT - Used to pay bills or to receive payments of bills. Services on current accounts: DIRECT DEBITS – Used for payments of various amounts. STANDING ORDERS – Used for payments of fixed amounts. CREDIT TRANSFERS – Used to pay sums of money into other people’s accounts or receive payments. DEPOSIT ACCOUNT – Used to keep the surplus cash for short periods. FOREIGN CURRENCY ACCOUNT – Used to trade overseas. Businesses also need finance. Bank offer short-term capital: OVERDRAFT – The firm can go “into the red” up to an agreed maximum, but with a charge on the overdrawn amount. LEASING – Hiring expensive equipment: the leasee pays a premium for a fixed period of time. FACTORING – A company sells its invoices at below face value to the bank (the factor) in return for immediate cash. It bridges the gap between issuing invoices and getting them paid, providing the cash flow for working capital. FORFEITING – For exporters who have accepted long-term payment conditions: the seller can transform a long extention of credit into cash. Bank offer long-term capital: LONG-TERM LOANS PROPERTY LEASES MORTGAGES