BANKING TODAY

The development of technology and our changing lifestyle have had a major impact on the
way in which people spend and manage their money. Now we can access our bank account
24 hours a day and carry out procedures (such as money transfer or payments online).
So also banks changed the way they operate and the services they provide.
New technologies such as ONLINE BANKING, TEXT ALERTS, CONTACTLESS CARDS…
have had a major impact on the industry and made modern banking quicker, easier and
flexible.
DIGITAL BANKING
Online banking services and mobile banking apps are used by millions of people every day
and are becoming the most popular methods of managing finances. A recent report stated
that 62% of Americans prefer digital channels.
ADVANTAGES:
1. digital banking is fast and simple
2. digital banking can be done at anytime and wherever
Lots of people use mobile banking in front of the TV, at work, in bed…
The most popular use is to check account balances, to transfer money between bank
accounts, to make peer to peer payments and to use apps to pay bills.
THE FUTURE OF THE BANK BRANCH
Banks are reducing their costs by cutting the number of branches (filiali) they have as a
consequence of the increase of digital banking.
A lot of the branches that remain are currently being altered to meet new roles. The areas
where people queued to withdraw (ritirare) money or deposit cheques are being removed
and replaced by CHASHPOINTS (bancomat), TABLETS, COMPUTER TERMINALS and
MEETING AREAS. In this way bank staff is more concentrated on helping customers who
need FACE TO FACE contact to discuss major issues (such as taking out mortgage).
Over the last decade a new generation of mobile-only banks has emerged. They offer purely
mobile banking without bank branches. An example is HELO BANK, which was created in
Paris and now operates also in Italy, Belgium and Germany or N26.
BANKING SECURITY
With online or remote banking, banks have to protect their customers from FRAUD.
Online fraud is when criminals attempt to deceive (ingannare) people in order to obtain
sensitive information, such as PIN number.
A common type of internet fraud is called “PHISHING”, criminals send bogus (finte) emails to
people and try to make them believe that they come from banks and they usually invite them
to click on a fake bank website. Phishers also send text messages (that is described as
“fraud alert”) and ask the recipients (destinatari) to make a telephone call to a number
controlled by criminals.
Baks have taken a lot of steps to make remote banking more secure:
● SSL and TLS that are technology to encrypt (crittografare) all transactions
● multi factor authentication (that requires for example name, password, security
questions..)
● geolocation
● transaction monitoring, which can check anomalies
Banks are also investing money in educating the public to keep their finances safe.
There are severals (molti) steps that you can take to protect personal informations:
➔ update your ANTI MALWARE (anti virus) protection
➔ never click on suspicious links
 ➔ never give sensitive information online
➔ use a strong password
➔ never click on strange pop-up windows
BANKING SERVICES FOR BUSINESS
Banks provide services to businesses to help them keep their money safe, assess it quickly
and easily. They are also a source of finance and can provide the funds that a company
needs to start up, run and expand their business. Services include BUSINESS ACCOUNTS,
LOANS, INVESTMENT ADVICE, CREDIT INFORMATION ON THE FINANCIAL STATUS…
BUSINESS ACCOUNTS
The most common types of business accounts are CURRENT AND DEPOSIT ACCOUNTS.
● CURRENT ACCOUNT: is an account from which money can be withdrawn or
payments made at any time. Companies use current accounts to pay their bills, may
using CHEQUES, CASH, CREDIT TRANSFER or DIRECT DEBIT. Usually
companies have to pay charges to the bank for the use of this type of account.
● DEPOSIT ACCOUNT: is an account in which money can be left for a period of time,
companies use this type of account to keep surplus cash safe. Usually banks pay a
small amount of interest on a deposit account.
There are also FOREIGN CURRENCY ACCOUNTS that are provided to companies that
trade with foreign countries.
SOURCES OF FINANCE
Businesses need finance for many reasons, for example to set up (avviare), expand or
modernize their operations. Banks can offer SHORT-TERM CAPITAL or LONG-TERM
CAPITAL.
SHORT TERM CAPITAL:
1. OVERDRAFTS (fidi): permit a company to borrow money on its current account and
“go into red” (have negative amount) ap to (fino a ) an agreed maximum. Overdrafts
provide funds for periods of negative cash flow or for an emergency. The main
disadvantage is that the bank manager may cancel the overdraft and ask for it to be
repaid at any time.
2. LEASING: is a method of HIRING (affittare) equipment such as machinery or
computers. The person or company that did the leasing, pays a set amount of
money to the owner (usually a bank) for a fixed period of time. At the end they have
the option of buying the equipment or exchanging it for an up-to-date one. In the long
term, it can cost more than to buy them.
3. FACTORING: is a flexible form of finance in which a bank advances money to a
company when it issues (emana) new invoices (fatture). A company sells its sales
invoices at a lower value for immediate cash. It bridges (colma) the gap between
issuing an invoice and receiving payments.
LONG TERM CAPITAL:
1. LOANS (prestiti): can be granted for a fixed amount for long periods of time. The
company has to pay installments (rate) plus interest.
2. MORTGAGE LOANS (mutui): are used to buy properties. The money has to be paid
back with interest over a fixed number of years.
ETHICAL BANKING
In the past, banks rarely considered the social and environmental impacts of their financial
transactions. Today however, people know more about the effects that banks can have with
their lending policies and there is a growing demand for ethically oriented banks.
An ethical bank is a bank that is concerned with the social and environmental impacts of its
investments and loans. They have an ethical policy and they use it to help them check
potential investors and partners. If the nature of the investor’s compromises the bank’s
ethical policy, it will refuse to accept the investment.
So the policy helps banks decide where to invest their money→ Ethical banks refuse to
invest in companies that have a history of child labour or poor conditions and pay or in
companies involved in arms trade.
Examples of these types of banks are: TRIODOS, BANCA ETICA (the first in Ital), GLS
BANK, CULTURA BANK.
UNBANKED
In 2017, 1.7 billion adults around the world didn’t have a bank account. the majority of these
people live in the developing world (China, India, Bangladesh,Pakistan,Mexico, Indonesia…)
But the WORLD BANK however, illustrated that a lot of people in high-income (alto reddito)
economies also live without the security of a bank account.
The survey (ricerca) of the WORLD BANK discovered that about 1.1 billion of UNBANKED
ADULTS own a mobile phone that could help them access financial services.
MOBILE PHONE BANKING would help overcome (superare) some of the barriers to having
a bank account.It would eliminate the need to travel long distances to a bank and the waiting
time to obtain payments, lower cost of financial services…
To bring more people into the financial system, the world bank proposes that organizations
should make more use of the digital technology by paying directly into mobile accounts
instead of paying in cash. For governments this switching would reduce corruption and
improve efficiency.
MICROCREDIT
Even (perfino) when people possess a bank account, they may not have adequate access to
the financial services that banks can provide, because they are reluctant to provide loans or
overdrafts to people without a job.
Microcredit is the extension of small loans to unemployed people and others living in poverty.
The idea originated in 1976 with the GRAMEEN BANK (Bangladesh). This bank was
founded by YUNUS, with the objective of ENABLING POOR PEOPLE TO ACCESS CREDIT
which would help them develop economically. The banks started with microloans for
self-employment projects and went on to develop other systems of credit, such as housing
loans. In 2016 Grameen bank was awarded the NOBEL PEACE PRIZE. Today the bank has
expanded to more than 2000 branches.
The success of the Grameen Bank has inspired similar ventures in other developing
countries (such as GRAMEEN FOUNDATION in the USA).
Today microcredit is gaining credibility in the finance industry.
CRYPTOCURRENCIES (criptovalute)
Are a form of ELECTRONIC MONEY which is passed directly from a person to person and
is created and controlled by technology.
Cryptocurrencies are part of a database, called “blockchain”, which is shared across a
network of thousands of powerful computer systems.
A cryptocurrency transaction consists in the creation of an entry (voce) into de database.
The transaction is verified by the computer system and if it is valid, it is added to the
blockchain. This system controls the database and makes sure that people don’t transfer the
same cryptocurrency to two people.
Characteristics:
★ THEY ARE IRREVERSIBLE: after the network has confirmed the cryptocurrency, you
can’t retrieve (recuperarla) it.
 ★ THEY ARE FAST AND GLOBALLY ACCESSIBLE
★ THEY ARE ENCRYPTED: real names aren’t used for accounts. There are no rules
about who can use the cryptocurrency and what they can use it for.
★ THEY ARE VERY SECURE
BITCOIN
Bitcoin was the first database to be created in 2009. It was issued to reward (ricompensare)
people and companies who helped process transactions in the blockchain. These people are
known as “MINERS” and the work they do is called “MINING”.
At the start bitcoins had a reputation as a payment method for illegal goods online, but today
thousands (migliaia) of reputable companies accept the currency as payment.
The benefits are that transactions can be carried out quickly with bio charges and that
people without bank accounts can still transfer funds, but the market of bitcoins is VOLATILE
and the value can rapidly change. Problems such as hacking, competition and technophobia
could affect the popularity of the cryptocurrency.
CENTRAL BANKS
A central bank is a financial institution that regulates the size of a state’s money supply, the
availability and cost of credit and the foreign-exchange value of its currency.
Its goals are to STABILIZE A NATION'S CURRENCY, TO KEEP UNEMPLOYMENT
LEVELS LOW, TO PREVENT INFLATION AND TO MAINTAIN AN ADEQUATE LEVEL OF
INTERNATIONAL RESERVES.
Central banks differ from commercial banks in 2 main ways:
1. They are public bodies : they are entirely owned by governments
2. Individuals cannot open an account with them, because they don’t deal with the
general public

THE EUROPEAN CENTRAL BANK

It is one of the 7 institutions of the EU and the central bank for the entire Eurozone. The
bank was established by the TREATY OF AMSTERDAM in 1998 and begun to exercise its
powers from 1th January 1999. The ECB is governed directly by European law. Its capital
(over 10 billion euros) is held (posseduto) by its shareholders (the central banks of the
member states of the EU). The objective of the ECB is to MAINTAIN PRICE STABILITY and
DEFINING AND IMPLEMENTING the monetary policy of the EUROZONE. The ECB has the
exclusive right to authorize the issue of euro banknotes and coins.
THE FEDERAL RESERVE SYSTEM
The Federal Reserve System (FED) is the Central bank of the USA. It is responsible for
regulating the US money and financial system. It also issues US currency and makes loans.
It has three main entities: the FEDERAL RESERVE BOARD OF GOVERNORS, the central
governmental agency based in Washington DC; the 12 regional FEDERAL RESERVE
BANKS and the FEDERAL OPEN MARKET COMMITTEE which sets credit and interest
rate policies.

STOCK EXCHANGES
A stock exchange is an organized and regulated financial marketplace where experts called
STOCKBROKERS can buy and sell securities (titoli), governed by the forces of supply and
demand. Securities are issued by companies → PUBLIC LIMITED COMPANIES (shares
“azioni”, debentures “obbligazioni”) and by public bodies (bonds “titoli di stato”). They can be
bought or sold if they are listed (quotati) in the stock exchange and they have to meet certain
requirements.
➢ SHARES: are equal parts into which the capital of a company is divided. The
shareholders (azionisti) own part o a company. A PLC can sell its shares to the
general public.
➢ DEBENTURES: are documents given to the lenders (prestatori) of long-term capital
to a company. The debentures (obbligazionisti) are creditors of the company not
owners (proprietari), and they receive a fixed rate of interest and the amount of the
loan at an agreed date.
➢ BONDS: are financial assets (patrimoni) fixed by governments, banks, public utilities.
Bonds pay a fixed amount at a specific end date.
Originally stock exchanges were open to all, but now only to the stockbrokers.
ELECTRONIC STOCK EXCHANGES
Nowadays, most trading at the exchanges is done electronically.
Electronic trading has a number of advantages:
stock exchanges doesn’t require brick-and-mortar structures;
there is less need to hire brokers (assumere dipendenti)
the cost of interactions is reduced.
As a result, investors have greater profits and stock markets have become more efficient.
STOCK INDEXES
Stock indexes are tools used to track the performance of the stock market.
It is too difficult to track the changes in value of every security on the market, so only a
smaller sample is measured. This sample is called an ‘index’.
Stock indexes are used by investors and financial managers to describe and compare
the market. As the stocks included in an index change value, the index also changes.
When business is good, the index tends to rise.
When business is bad, it falls.
There are many factors that can influence the movements of a stock index. These include
corporate and economic reports, domestic and foreign political events, natural and
man-made disasters like war and terrorism.
The main stock indexes in the USA are the Dow Jones, the NASDAQ and the S&P 500. In
Europe the main stock index is the FTSE 100 Index.