Tutorial:Business Academy Topic: Financial Market and Banks Prepared by: Ing. Ingrid Ilčíková Projekt Anglicky v odborných předmětech, CZ.1.07/1.3.09/ je spolufinancován Evropským sociálním fondem a státním rozpočtem České republiky.

DIRECT BANKING, PACKAGES OF SERVICES, PAYMENT CARDS

 remote contact with the bank, the possibility of ordering and performing banking transactions without personal contact, non-stop  formation in the 1990 as an alternative to „stone“ bank branches  opportunity to save money and time  faster, cheaper and more convenient, with the emphasis on financial security  other benefits – savings for the bank – fewer employees, smaller branches  operations are secured by password, code, electronic signature

Options  internet banking  e.g. in CB – free telephone line 800…..  mobile bank  self-service zones  telebanking

PACKAGES OF SERVICES  The client is interested in more services, the bank offers a package of products; a contract is signed, the bank gets a lot of information about the client, therefore it can offer more and more products at proper time The advantages of the package:  speed (direct banking)  liquidity (cheques, cards, overdraft option)  yield (savings account with a standing order)  overview (bank statements – paper, electronic)  safety (non-cash transfers of wages)  comfort (standing orders, insured payment cards)

PAYMENT CARDS History  the first payment card – American Telephone and Telegraph Company. It was made of plate and enabled the regular customers to make phone calls and send telegrams without immediate payments.  the first universally applicable payment cards - Diners Club – issued to its members for non-cash payments in restaurants The real bank card  The Franklin National Bank in New York. Free for trusted clients; merchants paid the bank a charge for payments. The clients had to pay the purchases within 30, 60, 90 days.  1988 – The CR – The first card was issued by the Zivnostenska Bank as a disposition card to the Tuzex account. In the middle of 1989 the Czech State Savings Bank started issuing its clients cards to their giro accounts so as they could withdraw money from the cash dispensers.

TYPES OF PAYMENT CARDS The basic criterion is the so-called method of accounting  Debit – you can pay in a shop or withdraw money from a cash dispenser, if there is enough money on the account. The settlement is usually made shortly after the transaction, within a few days or a week. The bank deducts the amount directly from the client´s account.  Credit – purchasing goods or services on credit. The settlement is made after the time specified by the bank. The money from the loan is available through a revolving credit limit, which is renewed automatically for the amount due. Banks set the minimum amount of loan repayment (usually % of the outstanding amount) and credit limit (depending on the client´s creditworthiness).

THE NUMBER OF CREDIT CARDS IN THE CR in mil. (the source: HN 16/11/2011)

THE STATE OF THE FINANCIAL SECTOR OF THE CR „The Big Four Banks“ – the share in total assets of the banking sector is almost 58 % - the order is set according to the amount of the profit. More often it is stated according to the number of the clients.  The Czech Savings Bank – 5.3 million clients (Austria)  The CSOB Group – 3 million clients (Belgium)  The Commercial Bank Group – 1.6 million clients (France)  UniCredit Bank Czech Republic – since 2007, The Zivnostenska Bank and The HVB bank joined together (Austria)

„TEN COMMANDMENTS“ FOR THE FINANCIAL SECTOR 1. Protect your money against robbers and counterfeiting. 2. Money has to earn even while you are sleeping 3. Examine the bank offers – that one looking attractive at first sight may not be the best one 4. Take care of your credit profile – do not change your jobs and addresses very often, pay bills on time, do not have many loans. Avoid the credit trap that does not match your income. 5. Create your investment portfolio; in case of a risky action consider how much you can lose a year. 6. Think of the „rear wheel“ – choose the optimal variant of insurance and savings. 7. Work with new money – consider which kind of direct debit is suitable, choose a payment card that does not have high fees for services you do not need. 8. Financial management starts with the daily monitoring of incomes and expenditures. 9. Watch what is happening at the money market, learn to understand the language of numbers and finance. 10. Remember the saying: „Money is a tool of the wise and the goal of the dull.“

ACTIVITIES:  On the Internet, find an offer of direct banking at the bank where you have an account.  What kind of service packages does your bank offer?  Who is the owner of individual members of The Big Four Banks in the CR?

RESOURCES:  Klínský, P. Ekonomika 3. Praha: FORTUNA, ISBN  Synek, M. a kol. Podniková ekonomika. Praha: C.H.Beck,1999. ISBN  Švarcová, J. a kol. Ekonomie – stručný přehled. Zlín: CEED, ISBN  Hospodářské noviny 