What should I know about a bank?
Modern life without banks and services they provide is hard to imagine. As we all know, “Money makes the world go around”, and since banks deal with money, it is important to know what banks really are and how they operate. Banks play an important role in the economy for offering a service for people wishing to save and equally important role in offering finance to businesses who wish to invest and expand. These loans and business investment are important for enabling economic growth.
So, the broad
definition of a bank would go something like this:
“A bank is a financial institution
licensed to receive deposits and make loans.”
From the definition, we see that bank is a financial institution which means there are other financial institutions beside banks. All those other financial institutions have their specifics and it is important to get to know about them, learn how to recognise them and their products and roles. Furthermore, banks are institutions that earn their profit dealing with money deposited by general public and that is why the definition says that banks should be licensed to receive those deposits. That means that banks are regulated by some higher entity which issues a license, usually it is the central bank of the country they operate in. The reason why banks should be regulated is best seen from the 2008 collapse which resulted in a worldwide crisis that lasted for many years.
But, although banks are regulated and monitored, there still are some existing risks and dangers when using banks and their products, especially since banks are recently becoming increasingly “digital”, or doing business online. Therefore, it is vital to learn about how to protect yourself when using financial products online and what dangers lurk while you do so. Also, the financial products themselves (such as loans) have their own traps in which you can get caught if you are not paying enough attention. Learning about interest rates and how to calculate them, knowing what you are actually paying when you get the loan and what are your consumer rights in regards to the financial product you are using are essential for keeping your personal financial condition healthy and safe.
So, the key terms for you to consider in completing this WebQuest include:
- Financial institution;
- Consumer rights;
- Loan and interest rate;
- Debt.
When you get to know more about what banks are and what differ other financial institutions from banks, it is time for you now to get basic awareness of how digital banking works, what are its advantages and how to remain safe while performing financial transactions online.
It is (more or less) well known that when you are purchasing any item or service, you are in possession of some consumer rights. This also applies in the financial world when you are a customer of a bank or any other financial institution. Completing tasks bellow, you will get an insight of what customer rights you own when purchasing financial products or making various financial transactions.
Completing these tasks you will be informed about all risks and potential dangers that exist in financial products and institutions offering them. You will be asked to evaluate current products that you use from your existing bank and decide should you make any changes. Also, this will enable you to explain risks and dangers to your family, friends or other people needing advice.
To complete this WebQuest, you will complete the following four steps:
1. Understanding the difference between banks and other financial institutions
2. Digital banking
3. Consumer rights
4. Risks and dangers- Understanding the difference between banks and
other financial institutions
Use these links to refresh your knowledge and learn something new about banks and other financial institutions. You will read about the importance of banks in general economy and how they are regulated and monitored. Pay close attention on learning the differences between institutions and their products, which ones are different and which are similar, and how to recognise them.
https://www.investopedia.com/terms/f/financialinstitution.asp
After you are done with the research, compile a list of financial institutions available in your country with financial products they offer and see if you can make an informed decision on which institution or product to choose that will help you achieve some long term plan.
https://www.econlib.org/library/Topics/College/banksandfinancialinstitutions.html
https://www.differencebetween.com/difference-between-bank-and-vs-financial-institution/
https://www.frbsf.org/education/publications/doctor-econ/2001/july/bank-economic-function/
https://www.streetdirectory.com/travel_guide/145362/banking/everything_you_need_to_know_about_banking.html
https://www.espressoenglish.net/8-things-to-do-at-the-bank/
https://www.investopedia.com/terms/b/bank.asp - Digital banking
From the articles listed below, you will be encouraged to learn about digital banking: what is it actually and some basics on how it works and used. This will help you understand what role digital banking have in your life and financial world in general.
https://www.temenos.com/news/2019/12/19/what-is-digital-banking/
After you are done with the research, try to find out which banks have the best online apps (based on the customer review) because this is becoming increasingly important in our modern digital world. Also, make a list of possibilities (min. 5) that digital banks offer.
https://teknospire.com/what-is-digital-banking-and-how-digital-banking-works/
https://www.techfunnel.com/fintech/digital-banking/
https://www.depositaccounts.com/blog/10-things-to-look-for-in-a-bank.html
https://localfirstbank.com/article/four-different-types-of-services-banking/
https://www.espressoenglish.net/8-things-to-do-at-the-bank/
https://economictimes.indiatimes.com/wealth/spend/8-tips-to-use-internet-banking-safely/articleshow/55113849.cms - Consumer rights
Your task here is to find out what your rights are and where are the risks that can adversely affect your financial situation. You can find these information using links below:
http://www.evershedslearning.com/global/en/what/articles/index.page?ArticleID=en/Financial_institutions/Consumer_Rights_Act_and_the_impact_on_financial_institutions
Make a presentation in which you will describe your rights as consumer of the financial institutions and whom to complain in regard to some financial institutions or products.
http://www.sama.gov.sa/en-US/ConsumerProtection/Pages/ConsumerRights.aspx
- Risks and dangers
Your task is to learn how to avoid dangerous financial situations. There are many of them and every single one can affect your life greatly. Read form articles below to learn as much as possible about all dangers and risks that exists while you are using financial products.
https://www.forbes.com/sites/nickclements/2016/01/05/10-things-you-absolutely-need-to-know-about-banking/#cbdb02612a0c
List 5 or more services offered by banks or other financial institutions and give examples of dangers that can occur during executing these operations. Your task is to learn how to avoid dangerous financial situations.
https://www.igrad.com/start/start-here-banking
https://www.investopedia.com/terms/f/financialinstitution.asp
https://www.econlib.org/library/Topics/College/banksandfinancialinstitutions.html
After complete this WebQuest, I can:
| Recognise different financial institutions | ||
| Outline other institutions that offer similar products | ||
| Describe banks importance in the economy | ||
| Reflect about regulatory and supervisory responsibilities | ||
| Analyse the role of digital banks | ||
| Compile the main differences between banks and financial institutions and similar institutions | ||
| Select some consumer rights and duties regarding financial institutions | ||
| Identify how to complain regarding a financial institution | ||
| Self-evaluate what do you want from your bank | ||
| Showcase alternatives to your relation regarding your bank | ||
| Promote responsible attitudes as a financial consumer | ||
| Contribute to conscious consumers, aware of their rights |
*If you answered NO to more than half of the statements, you should go through WebQuest again and acquire more knowledge and skills if you answered YES to almost all questions; congratulations on your great success!
Financial institutions serve most people in some
way, as financial operations are a critical part of any economy, with
individuals and companies relying on financial institutions for transactions
and investing. The specific services offered vary widely between different
types of financial institutions. Financial institutions offer a wide range of
products and services for individual and commercial clients and governments
consider it imperative to oversee and regulate banks and financial institutions
because they do play such an integral part of the economy.