Demand grows for banking from home

Ø 1) What banking services can be transacted from home (open an account, pay bills, transfer between accounts, receive information about mortgages, loan money, etc.)?

Ø 2) Look at the phrases, taken from the text: banking from home, to launch a 24-hour banking service, to open an account, to pay bills, mortgage, to transfer, insurance schemes, a savings account, to transact. What do they mean?

 

Banking from home is growing in popularity. Almost everything you can do in a bank can now be transacted from the comfort of your home.

Tyson Service Bank (TSB), whose new 24-hour banking service will be launched in the coming weeks, is the latest bank to join the ranks of phone banking service providers. “Much of this has been going on in an informal way for a long time,” said TSB’s Head of Marketing Sean Curtiss. “All we are doing is rationalizing the process.”

Like its competitors in this field, the TSB service will offer the facility to open a working account, transfer between accounts, pay bills and receive information about mortgages and other bank products.

One step ahead technologically, the new Internet banking services provided by Bank of Ireland and Allied Irish Bank (AIB) are proving a huge success. Bank customers can do everything they normally do by phone through computer, including transferring money and paying bills.

“We are overwhelmed by the response – over 6,500 customers are now using on-line banking,” said Bank of Ireland’s Creeda Mahon. Although there are no on-line product sales as yet, information on mortgages, insurance schemes and savings accounts can be got from the bank’s web site.

Brian Dinihue of AIB confirmed that its Internet service had received much interest since its launch. “So far the consensus is that it works very well but we are open to suggestions on how we can improve it,” said Donohue. “We are not selling product yet but plan to ask our Internet customers what they would like to see next and will act accordingly.”

 

Ø 3) Say if the statements are true, false or there is no evidence in the text:

a) Tyson Service Bank (TSB) will launch a 24-hour banking service,

b) some banks in Europe, such as Allied Irish Bank,

c) the Bank of England and the Bank of Russia started the home banking service some years ago, which proved a great success,

d) TSB will offer a number of facilities, such as opening a working account,

e) transferring between accounts, paying bills, getting information about mortgages,

f) The Banks are open to suggestions on how they can improve.

 

AT THE BANK

Ø 1) Answer the questions:

a) Would you like to work in a bank? Why or why not?

b) How often do you go to a bank? What do you usually do at a bank?

 

Larry Hardy needs to get some money for a trip that he has to take. So, he takes time at lunch to stop by his bank to cash a check. He decides to go to the drive-in window to save time.

He is pleasantly surprised to see that his neighbor, Emma Wilson, is now working at the bank. He presents his check for $300 and his identification card to Mrs. Wilson. She verifies his signature and account number and asks Larry how he would like his money.

He says: “Let me have $100 in tens and the rest in twenties.”

 

Ø 2) Ask questions to these answers:

a) He’s going to cash a check.

b) During his lunch time.

c) He wants to save time.

d) She’s his neighbor.

e) His check and identification card.

f) It is for $300.

g) First, she verifies his signature and account number.

h) He gets tens and twenties.

GETTING A LOAN

Ø 1) Answer the questions:

a) Is your flat cozy and comfortable? Do you want to improve your flat? What do you want to do with the place you live in?

b) Have you ever taken a bank loan? What was the loan for?

 

Sam Slater wants to add a recreation room to his house, but he doesn’t have enough money. He decides to go to his bank to ask for a home improvement loan.

Mrs. Kelly, the loan officer at the bank, is very pleasant and helpful. She and Sam discuss his money needs and the terms for getting a home improvement loan. Sam is glad that the interest rate is not very high.

After Mrs. Kelly asks Sam a number of questions, she fills out loan application form. She tells Sam that his interest rate for a loan will be reviewed by some of the bank officers. She tells him that she will call him in two weeks with the result.

 

Ø 2) Ask questions to the answers:

a) Because he doesn’t have enough money.

b) A home improvement loan.

c) She is a loan officer.

d) Yes, she is very helpful.

e) They discuss Sam’s money needs.

f) No, it isn’t very high.

g) Mrs. Kelly fills out the form.

h) Some of the bank officers will review the interest rate.

 

Credit card

Ø 1) Do you have a credit card? Is it convenient to have and use it?

Ø 2) Scan the text and find the information on:

a) the date of the credit card invention,

b) what a secured credit card is,

c) the opportunities for fraud in the credit card system, and what they created,

d) the improvements to card security.

(1) A credit card systemis a type of retail transaction settlement and credit system, named after the small plastic card issued to users of the system. A credit card is different from a debit card in that the credit card issuer lends the consumer money rather than having the money removed from an account. Most credit cards are the same shape and size, as specified by the ISO 7810 standard.

(2) A credit card user is issued the card after approval from a provider (often a general bank, but sometimes from a captive bank created to issue a particular brand of credit card, such as American Express Centurion Bank), in which they will be able to make purchases from merchants supporting that credit card up to a pre-negotiated credit limit. When a purchase is made, the credit card user indicates his/her consent to pay, usually by signing a receipt with a record of the card details and indicating the amount to be paid. More recently, electronic verification systems have allowed merchants (using a strip of magnetized material on the card holding information in a similar manner to magnetic tape or a floppy disk) to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase.

(3) Some services can be paid for over the telephone by credit card merely by quoting the number embossed onto the card (the credit card number), and they can be used in a similar manner to pay for purchases from online vendors.

(4) Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, and the total amount owing. The cardholder must then pay a minimum proportion of the bill by a due date, and may choose to pay more or indeed pay the entire amount owing. The credit provider charges interest on the amount owing (typically, a fairly high rate much higher than most other forms of debt). Typically, credit card issuers will waive interest charges if the balance is paid in full each month, which allows the credit card to serve as a form of revolving credit.

(5) As well as profits through interest, card companies charge merchants fees for money transfer. When the companies formally or informally prevent these fees from being passed on to credit card users but instead require them to be spread among all customers, this raises the possibility of a harmful market imperfection through the mechanism of the Tragedy of the commons, especially as some credit providers give their users incentives such as frequent flier miles or gift certificates. Australia is currently acting to reduce this by allowing merchants to apply surcharges for credit card users. Credit card companies generally do provide a guarantee that the merchant will be paid on legitimate transactions regardless of whether the consumer pays their credit card bill. However, credit card companies generally will not pay a merchant if the consumer challenges the legitimacy of the transaction and will fine merchants who have a large number of chargebacks.

(6) The credit card was the successor of a variety of merchant credit schemes. The concept of paying merchants using a card was invented in 1950 with Diners Club’s invention of the charge card, which was similar but required the entire bill to be paid with each statement. Credit card service was first offered in 1951.

(7) In recent times, credit card portfolios have been exceedingly profitable to banks, largely due to the booming economy of the late nineties. However in the case of credit cards, such high returns go hand in hand with risk.

(8) A secured credit card is a special type of credit card in which you must first put down a deposit between 100% and 150% of the total amount of credit you desire. Thus if you put down $1000, you will be given credit in the range of $500–$1000. This deposit is held in a special savings account. The owner of the secured credit card is still expected to make regular payment, as he or she would with a regular credit card, but should he or she default on a payment, the card issuer can deduct payments on the card out of the deposit. Secure credit cards are an advantage to anyone with poor or no credit history. They are often offered to people as a means of rebuilding one’s credit. Secured credit cards are available with both Visa and MasterCard logos on them.

(9) As well as convenient, accessible credit, the cards offered consumers an easy way to track expenses, which is necessary both for monitoring personal expenditure and the tracking of work-related expenses for taxation and reimbursement purposes. They have now spread worldwide, and are offered in a huge variety of permutations with differing credit limits, repayment arrangements (some cards offer interest-free periods, while others do not but compensate with much lower interest rates), and other perks (such as rewards schemes in which points “earned” for purchasing goods with the card can be reclaimed for further goods and services).

(10) In addition, some countries such as the United States limit the amount that a consumer can be held liable for fraudulent transactions, which shifts the liability to the merchant. This encourages the use of credit cards for electronic and mail order transactions, collectively called “card not present” transactions. For further security, some banks are offering one time numbers for use in these transactions. They have spread far and wide beyond their initial market of the wealthy businessman and are now ubiquitous amongst the middle class of most Western countries.

(11) The relatively low security of the credit card system presents many opportunities for fraud. However, this does not imply that the system is broken. The goal of the credit card companies is not to eliminate fraud, but to reduce it to manageable levels, such that the total cost of both fraud and fraud prevention is minimized. This implies that high-cost low-return fraud prevention measures will not be used if their cost exceeds the potential gains from fraud reduction. This opportunity for fraud has created a black market in stolen credit card numbers, which must generally be used quickly before the cards are reported stolen.

(12) Three improvements to card security are being introduced to the more common credit card networks now. An additional 3–4 digit code is now present on the back of most cards, for use in “card not present” transactions. The on-line verification system used by merchants is being enhanced to require a 4 digit Personal Identification Number (PIN) known only to the card holder, and the cards themselves are being replaced with similar-looking tamper-resistant smart cards which are intended to make forgery more difficult. The majority of smartcard (IC card) based credit cards comply with the EMV (Europe Visa MasterCard) standard.

(13) The 3–4 digit numbers for use in “card not present” transactions are to be found in different places on the various cards, and are referred to differently by the card issuers: AMERICAN EXPRESS: 4 digits long, printed on the front side of the card above the number, referred to as the CID, or Card Identification Number. MASTERCARD: last 3 digits of the number printed on the back signature panel of the card, referred to as the CVC, or Card Validation Code. VISA: last 3 digits of the number printed on the back signature panel of the card, referred to as the CVV, or Card Validation Value.

Ø 3) Name the paragraphs containing information on:

a) the shape and size of credit cards,

b) payments over the telephone by credit card,

c) the rights and duties of cardholders,

d) the case when credit card companies don’t pay the merchant, and even fine them,

e) the systems of security in the three most famous credit cards: American Express, Visa and Mastercard.

 

 

FLEXIBLE MORTGAGES

 

Ø 1) What are advantages and disadvantages of having a mortgage?

Ø 2) Read the heading and the words from the article and say what it is about: to adjust, to borrow, debt, equity, flexible, income increase, interest rate, liability, mortgage, penalty, to suit.

 

Flexible mortgages can be adapted to suit home-owners’ varying financial needs.

A mortgage which adjusts to the ebbs and flows of a borrower’s financial situation could become a popular option with households who experience variations in income levels.

With a flexible mortgage, you can link many of your debts under one roof with the advantage of interest rates of between 5% and 7%. Having all your borrowings together has obvious management advantages.

If the equity in a house is higher than the value of a current mortgage and the applicant can prove that he or she is capable of meeting the repayments, remortgaging can allow you to set by a sum which can be drawn down gradually for home improvements.

There may, of course, be a tax liability if the extra money borrowed is used for purposes other than the house or garden. Also, since the borrowings are over a much longer period, the eventual repayment sum will be considerably higher than with a term loan. And it is important not to forget to change your life cover to suit the altered circumstances.

A big attraction is the fact that a flexible mortgage can be adapted to suit changes in a person’s financial circumstances. The facility to take a sabbatical on repayments can be invaluable when finances are at low ebb. Many incomes these days are so irregular that six-monthly or even annual repayments may suit better – and believe it or not, this can be arranged. You can even opt for a dual rate, part-fixed and part-flexible, so that you are safeguarded whatever way interest rates move.

So why are flexible mortgages such a closely-guarded secret? “We don’t broadcast all we can do because most people just want simplicity and a fast response,” said Wyndham Williams, Allied Irish Bank (AIB) Head of Mortgages.

“We allow any frequency of repayment, yearly, seasonal – anything to suit a customer’s cash flow. We can also allow you to take a six to 12 months break in repayments or arrange a reduction in repayments.”

AIB also facilitates a “top-up” of an existing mortgage, although Williams was quick to point out that the Revenue Commissioners may ask for proof that the money was used for a backyard swimming pool and not for a brand new Lambordhini.

Independent mortgage consultant Shane Richardson of National Mortgage Services says that once the value is in your home, there is nothing to stop you borrowing extra to help clear off all your loans, choosing whatever rate you prefer. “What this is giving you is cash flow – using the equity in your property to allow you to live,” said Richardson. “Home improvers may want to pay electricians, plumbers and plasterers on a piecemeal basis, with part of the money upfront. Remortgaging can facilitate this.”

On a cautionary note, Richardson stressed the importance of remaining in a careful control of your borrowings. “We are concerned that if a customer, who is a bad manager, clears all their debts by extending their mortgage, they may quickly get into the same situation.” We say, “Please don’t go off and borrow again because they are using up a vast chunk of their equity in the process.”

Bank of Ireland’s flexible mortgages offer a number of options. They will pay the first-time buyer’s grant up-front for a customer and claim it back from the government. They have a split interest rate option where the customer can choose to divide his/her mortgage rate between fixed and variable. From 5 to 30-year terms can be arranged for borrowings up to an age limit of 75. Customers can choose to repay for 10 months of the year if it suits, taking Christmas and the summer months off.

Most banks and building societies offer breaks in repayments of up to three months over the term of the loan – an attractive option for those taking maternity leave or a short career break for study.

You can arrange for your mortgage to be index-linked, with repayments increasing by 2% or 3% each year to keep pace with wage rises and inflation. In some cases, up to 10% of a lump sum can be used to reduce the loan each year without incurring a penalty.

The secret of managing a flexible mortgage is to look on it as a loan which will tide you over a bad period, but ultimately it should reduce interest penalties when the good times return.

Ø 3) Answer the questions:

a When are flexible mortgages especially useful?

b Why aren’t flexible mortgages used widely?

c What causes concern on the part of a bank?

d What does Bank of Ireland offer?

 

Ø 4) Make up an outline of the text in writing.

Fundraising Basics

Ø 1) Have you ever participated in the fundraising activities? What did you raise money for? Was it difficult to persuade people to donate money for that purpose?

Today there are more non-profit and charity groups than ever. On the one hand, this is a great development - it means that as a society we are becoming more aware of a need to give to others. We even see that people are taking the necessary steps to ensure that we help others. On the other hand, though, the presence of so many non-profits creates a unique problem – “donor’s burnout.”

In short, did you realize that there was more donation drive running across your neighborhoods, TVs and newspapers?

The increased competitiveness of fundraising has created a whole new business: the fundraising business. There are consulting firms that will help you fundraise more effectively - for a price, of course. There are also many companies that claim that their fundraising efforts or products will make money for you non-profit in exchange for a share in the profits.

Many people assume that fundraising is as simple as holding garage sales or some other activities until enough money is raised. If you only want to raise a small amount of money for a specific purpose (e.g. Student’s fund for college), this may be fine, but for many groups using this approach is too uncertain and too limited to be very effective.

If your group is around for a while because your organization runs on donor’s support, then you will want to raise money consistently in order to keep your group going. You will need to learn many things in order to keep enough money coming consistently: fundraising is not an easy activity and it does require skills to achieve the best results.

 

Ø 2) The text contains a number of words to describe fundraising activities, such as donation, fundraising, etc. How many can you find?

 

A job opening at a bank

Ø 1) Read the text quickly and answer the questions:

a) Is the text a recruitment advert, a news article, or an advert for some journal?

b) Is the text for university graduates, people with experience, people who haven’t been to university?

THE BANK

A mid sized private sector Bank with an asset footing of? 50 billion operating with a countrywide network of 50 Branches (being expanded to 65 by the year end), desires to re-position itself to become a key, top quartile local bank amongst its competitors.

Its current focus is on growing multiple lines of business, while strengthening its existing niche in the commercial middle market and expanding credit to the agriculture sector. More importantly the Bank now wants to build its retail/consumer banking business segment faster especially in the field of housing finance.

The outreach and scope of the products and services set aimed at its commercial customers is to be broadened and deepened. The development of the new financial products in all of the above segments has to be fast tracked and marketed.

The shareholders are committed to make the Bank a significant player in the above referred areas. The Bank expects to grow rapidly in the next 3 to 5 years building a high level of awareness in the market for the franchise.