Small Business Security – It’s A Serious Business

People who own and run small businesses may have been overlooked in the past. Not attracted to the big budgets and sophisticated requirements of big business, the security industry has not focused on providing small business security. Small businesses had to settle for inappropriate and overpriced security that resembled home security systems.

But there’s good news. Leading security industry manufacturers and providers are paying attention now. They’re beginning to understand that the unique needs of small business security require tailored security measures and systems.

Small business security does have one advantage. Needing smaller staff and experiencing less turnover than large businesses, small business’s risk for in-house theft is significantly less, reducing the need for inventory tracking and video monitoring for break rooms and storage areas. But small businesses still face serious risks for theft, vandalism, and violence.

Small business security needs are in many ways like those of corporations and individual homeowners. Common-sense security measures are important. Things like removing potential hiding places for would-be thieves by eliminating blind spots on building exteriors is a basic preventive measure. Lighting the building, inside and out, makes it possible for people outside the building to observe criminal activity at night and when the business is closed. Keeping entry points clear of obstructions and shadows is important to safety and security. Installing locks with security codes for individual employees prevents entry by unauthorized people.

Exterior lighting is not only important for security. It’s an important way to prevent injuries to customers and to prevent crimes against both customers and employees outside the building. Liability insurance is a significant expense, and good exterior lighting can qualify small businesses for discounts and insurance savings. So in a way, liability insurance is a good small business security measure.

Every year, small businesses lose billions of dollars to preventable theft and vandalism. Monitored commercial alarm systems are an inexpensive and effective way to protect your small business. They’re easy to install in less than a day, and they’re easy to operate. A good small business security system will include control panels, security keypads, glass break sensors, window and door contacts, motion detectors, and sirens. Systems can be hard-wired or wireless. They can include loud immediate alarms or silent alarms that alert law enforcement without interrupting ongoing business. They can have add-ons like fire alarms and video surveillance. You can get a back-up system to assure your small business security needs are covered at all times.

If you haven’t already done it, you should ask a security professional to inspect and assess your small business for vulnerabilities and ask for a proposal that addresses them. Inherently more vulnerable to financial losses, there’s no such thing as too much security for a small business. An expert in the field can help you identify your small business security needs and create a plan that both meets your budget and makes your small business more secure.

When shopping for a small business security system provider, there are a few basic ways to select the best one for your needs. First, you should always talk to more than one company. Three or four reputable vendors is a logical choice that produces competition and gives you a variety of ideas and options. They should be willing to come to your business for face-to-face meetings. Be sure to get the proposals and price estimates in writing, and make sure the proposals are complete, including monthly charges, set-up and installation fees, and warranties. Find out if they offer training for you and your staff. Once you’ve made a commitment, review the contract very carefully to make sure it includes all the options you discussed with them.

The small business security specialist can analyze your physical layout, your internal procedures, and your vulnerabilities to help you come up with a comprehensive plan.

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Branch Banking – A Cat With Nine Lives

Branch Banking – A Cat with Nine Lives
Dr. Nicos Rossides: CEO MASMI Research Group
Bud Taylor: Director Consulting MASMI Research Group
Introduction

Branch banking is dead!  Technology is killing the retail branch!  The Internet rules!  Younger tech savvy customers are taking over as the brick & mortar customers die off!
Maybe.  But to-date we have not quite lopped off the head of the face-to-face banking Hydra.  Things may be different in twenty years, but they’re not dramatically different today.
But we like being in denial.  Every time we are confronted with evidence of the survival of branch banking we find ways to dismiss it.  For example, research in the UK published by Deloitte & Touche in September 2002 found that 80% of bank customers use the branch, and 52% regarded it as the preferred channel. Similarly a Gallup Poll conducted in the US in April 2003 found that 83% of Americans had visited their bank at least once a month on average over the previous year. It is easy to disregard these studies – we can dismiss them as dated.

When we update the studies we get some indications as to the impending demise of branches. For example, an American Bankers Association survey in the summer of 2007 found that 36% of U.S. consumers use branches as their primary banking method. Is that the death knell?  Not really.  That 36% is still the largest group for any one channel. Online banking came in second at 23%, followed by ATMs at 21%, mail at 8% and telephone banking at 5%.  Damn, thought we had them!

Ok, Ok.  Branch banking still exists, but is it just for the old and infirm? You know, those people who have a difficult time getting around and would find it most convenient to do their banking from their home.  Yes, that group.  Well, maybe they are the ones holding onto the legacy of the past, but does that mean that young people don’t want to do their transactions in a public location? The evidence only confuses matters further. The 2007 American Banker’s Association survey found that those who go to a bank branch are generally older folks; but still, a substantial 25% of those under the age of 34 side with the older crowd and prefer to do their banking in person.  When will these youngsters learn?

Even if we take a somewhat narrow look at branch banking in New York City we come up with the same trend. In September 2007 the New York Times reported that branch visits decreased by 11.5% between 1995 and 2000; yet they increased by 28% between 2000 and 2006.  What can we conclude from this? Many things, but the imminent demise of branch banking isn’t one.

If we extend our scope of vision beyond banking we find that younger generations like physical retailing even in their technology world where you’d think they would always gravitate to online purchasing for the latest electronic gadgets.  That’s not the case.  Apple’s retail stores are a magnet for younger consumers, and this is turning out to be good business.  These stores now contribute close to $1.25 bn. to the company’s annual revenues of $6.2 billion and rising – with a profit margin exceeding 20%.  That’s huge by retailing standards. Of course, we need to be careful here.  Is it really possible for transactional banking to rival Apple’s retail experience?  It may not be possible, but it is a good target.

Why Don’t Customers Comply with the Efficiency of Technology?
So, as much as we try, we can’t make the case that retail branch banking is dead in the US, in Europe, or in Emerging Markets.  It may be dwindling, decreasing, or diminishing, but it’s not dying.  That may be good news for customers, but it’s bad news for bank executives.  Branches are the most expensive way of conducting transactions.  Computers were invented to process millions of transactions at centimes per transaction.  Do this from your house, or car phone, please!  You don’t need to go to a building that houses friendly people.  Banks have to invest capital in information systems and technology to do volume processing, but they’d prefer not to continue the capital drain into structures and operating expenses for people.

Why don’t bank customers just “stop” using branches?  Why don’t they follow good business principles and complete their transactions efficiently, by machines?  Well, MASMI research demonstrates the hypotheses that trust (a somewhat elusive yet critical notion) is an important driver of choice; and trust tends to be delivered better by people than by machines.

“Banking”, read that as “my money”, is so important to customers that they want to entrust a personal transfer of their wealth to a human being – on the assumption that a person understands the value of the transaction, whereas a machine only sees it as a transaction. This is an interesting hypothesis and a body of MASMI research corroborates it.  We see that customers want more than a transaction; they want to personalise their relationship with the bank.

This desire for a relationship may be stronger in banking than in many other business sectors because banks have high switching barriers.  Customers are fundamentally averse to artificial constraints as a way of doing business – they want choices.  When customers don’t have choices, they want to be compensated. When it comes to banking, the compensation is the personalisation of the transaction.  Customers tend to be saying, “…I may not be able to easily put my money somewhere else, but I can make my bank provide personal accountability when I want it!  I want to be sure someone is handling my money – not just a machine.  I want to see human beings, so I can relate to them, and I don’t want to travel across the city to a strange neighbourhood to find them.  I want them down the block, at the corner.”

Banking should see this as a huge opportunity.  Relationships are the essence of customer loyalty and they have fallen into the banks’ lap.  Banks that continue to build their business on faceless transactions will lose in an increasingly competitive world.  The push for faster, better, cheaper is a siren call.  In commoditised banking only one competitor is allowed to dominate at any one time – until someone else shaves a point off a transaction.  Customers are giving us the answer to these ever-decreasing concentric-circles of cost reduction.  They want a relationship.  The question is whether we’re willing to listen and can provide this cost effectively. The bank that listens will win.  It will keep its customers who will purchase more and refer the bank to others.  For the foreseeable future, banks will need to continue to invest, albeit wisely, in their branch network.  The fact that branch banking is expensive is irrelevant – it has to be done.

Since you have to make the investment, doesn’t it make sense to maximise the return in a branch development strategy?  Of course it does!  So what do we do?  We have to meet the customer expectations for two things: excellence in operational mechanics (the rational dimension), and creating engagement in relationship dynamics (the emotional dimension).
Customers want more than a “painless” transaction

Our banking executives are fine with the operational mechanics part.  They understand this, they can control it, it’s right brained. Banks have a good measurement handle on their missions from an internal, transactional point of view.  They have numbers and they know how to manage by the numbers – even from a customer perspective. They immediately go to defining and implementing best in class metrics, like:
o    Efficiency to measure the relationship between inputs and outputs.  That is, what does it cost to complete a transaction?  How many tellers does it take to serve 100 customers?  How many square meters of floor space is required per 100 customers?  How much computer time does it take to process a transaction?
o    Level of service that brings time into the equation, like turnaround. Time needed to complete a transaction?  Time needed to resolve an issue?
o    Quality of service that brings accuracy to the table.  Number of error free transactions?  Number of complaints resolved at the first level?

These are the essentials. We know how to measure transactions, identify service gaps, and take corrective action. But these essentials are only an ante.  This is taking “pain” out of processing; but this isn’t playing the whole game.  This isn’t where we should stop.  Yet, often managers do just that.  They don’t want to go further.  Stopping here is comfortable.  But stopping here doesn’t bring “gain”, and that’s how banks can differentiate themselves.
Differentiation is all about enhancing the dynamic relationship that customers have with their bank – and the focal point of this relationship is the branch.  Sure, we can ‘humanize’ the IVR system by recognising the caller by name; and we can evoke an emotional connection to a website by embedding your avatar into the transaction. However, how effective can a machine or technology be in this regard?  At what point does clever technology fail to overcome customer cynicism?  For the present, at least, our research says that most people prefer to interact with human beings, not machines.  What is this customer group looking for?

Customer Centred Business Strategy

At MASMI we know that once customers have their rational needs satisfied then they’re willing to enter into a relationship.  Something that is emotional and personal.  There is a huge body of research and literature to support this belief.  Often the proponents have widely different perspectives on how our rational and emotional beings interact.  For example, Clotaire Rapaille presents the thesis of our “reptilian hot buttons” and argues that our reptilian emotional brain always wins.  Antonio Damasio comes from the point of view that emotion and reason are not separate, but are quite dependent on each other – neither leads nor follows.  Bank branches may not resolve these positions, but they need to address the point of agreement, that emotions matter! There is a relationship among our memories, our emotions, and our behaviours.

The need for an emotional connection while banking will differ by customer.  It’s not critical for everyone; it’s likely strongest for the people who keep going to branches.  So, if we’re going to spend money on a branch strategy, how do we make the best of it?  How do we tap into the emotional connection that customers seem to want?

First, we need to realign the banking business model around the customer. This might seem to be stating the obvious, but, in fact, traditional service models tend to be focused on optimising back office efficiencies with insufficient attention paid to the front office side of the equation.

MASMI research shows that high performing businesses put the customer at the centre of their strategy.  They articulate their strategic intent based on an analysis of customer needs and then build their key operational capabilities in alignment with that.   They recognise that the heart of their business is to provide pain free transactions that are infused with connectors that evoke emotional responses from customers.  The strongest way to do this in a bank is face-to-face at a branch.  A branch is more than a building – it is a stage where we can create a performance, an experience for our customers, where we can connect with real people.  But we need to know what buttons to push.  Research can give us some answers.
Reliable customer feedback is difficult to obtain as even complaints by customers do not represent a particularly reliable benchmark – for many reasons, not least of which is the fact that customer tend not to complain, even after bad experiences.  To get around this barrier we use a number of research methods to align the internally focused “customer service standards” with the externally focused “promise to customers”.  These methods include strategic customer loyalty research programmes aimed at understanding drivers of customer behaviour and corrective actions; performance tracking of transactions; and mystery shopping to monitor whether the promise to customers is being delivered.

All of these methods are aimed at uncovering the unarticulated needs held by customers that drive them to a face-to-face relationship at a branch.  What we have learned is that loyal relationships with customers come down to an activation of the person’s senses about their deeply held conviction of what a bank must be.  We all know the five senses that activate emotions.  They are seeing, hearing, feeling, touching, and smelling.  These have to be matched with the customer’s personification of their bank. That is, how does the branch banking experience reinforce the customer’s expectation of what the bank should be?

The branch can’t provide this experience until we know what customers want – and this may vary among branches.  For example, some customers might want their branch to appear “safe and secure”, while at another branch people expect to be treated “casually and informally”; somewhere else the branch must be the “friendly meeting place”, a social experience; while the cross-town customers want to have a sense of “efficiency and frugality”.

The right customer experience has a business purpose – it contributes to profitability through incremental sales.  Building relationships will require an advisory and service orientated profile within our physically redesigned branches. Better design plus skilled employees will certainly be required to personify the branch to enhance the emphasis on the emotive triggers – moving beyond a transaction towards building relationships.
Winning branches will find ways to work this personification and enhanced value addition into their operations. As neuroscientists tell us, we are emotional beings before we are rational ones. If we were totally rational, no one would smoke and everyone would eat organic food. Customers may find it hard to articulate their needs, but they come to their branch wanting to be comforted by the feeling that people at their bank is “one of us”, “…I feel good about my bank, they understand me”.

The emotional response to the customer experience starts in the parking lot.  Not finding a space creates anger; if the path to the door is clean, most people feel a sense of comfort; when the door opens easily they feel confident that things are working well at their bank.  What happens when they enter? Is there a safe in-sight to promote the feeling of security? Is there music to make them feel welcomed? What’s on the television while waiting for service – financial information that helps them feel up-to-date? How is the transaction completed? How are the staff dressed? Do they convey a sense of professionalism? Is the deposit slip on re-cycled paper to make them feel environmentally responsible or is it embossed with the bank logo to make them feel elegant? The beauty of branches is that they can be configured to meet local needs – one size does not fit all.  It’s all about “staging” at the branch level.  By conducting research into the customer experience we can pinpoint how to activate the emotions and keep customers coming back.

The bank branch is the strongest touchpoint for the customer assuring them that their bank “gets it”.  The branch engages most deeply with the emotions of the customer.  It is the branch that delivers the strongest relationship and activates emotions.  A bank’s Internet site can be easy to navigate, and an ATM transaction can be efficient – but efficiency only touches one dimension of a complex web of requirements from a banking partner.  Slick automation doesn’t tell us a lot about professionalism, security, and concern for me when things go wrong.  I want to go to my branch, and I do!  
Bank Branches and the Credit Crunch

Of course, headlines across the world in 2008 have been dominated by the impact of the credit crunch and the subsequent banking crises, with bank failures, bankruptcies, government bail-outs and eventual part nationalisation in some countries. Billions of dollars have been pumped into economies world-wide to prevent systemic banking failure, and try and encourage greater liquidity into the money markets.

Yet how much this affects the individual bank customer is difficult to judge at this stage. Clearly when there is fear of an individual bank collapse, scenes of depositors trying to withdraw their money become prominent in the media, such as appeared in the UK with the collapse of Northern Rock in 2007. However, whether this fear has permeated customers at a widespread general level is too difficult to judge at this stage. There is little evidence to date that customers are concerned with who owns their bank – whether it is one institution or another or the government – as long as their savings and deposits are not at risk.

And it may be in such difficult times that the branch will come to play an increasingly important role in terms of providing a visible sign of a bank’s permanence and viability. MASMI’s research has shown that, in Emerging Markets, where the banking sector is still relatively immature and local bank failures are not uncommon, for many customers a visit to the branch remains important – not only because it helps them to better understand details about a bank’s products and services, but as a means of providing reassurance as to a bank’s stability. In a world where even banks in developed markets are perceived as weak, the branch may acquire greater symbolic status.  It can give customers what they really need: a sense of trust, and a degree of confidence that their bank is here to stay and has a relationship with them.  It’s not a glass tower full of over compensated executives.  It’s a part of their life, staffed by people just like them – good people who are trying to build a good life, and who strive to serve them with honesty and care. Ultimately, the litmus test is whether customers feel that through its branches the bank is an indispensable part of their own lives.

Conclusion
The branch is critical in the life of a bank. Significant numbers of customers still visit the branch weekly. But branches need to be more than simply efficient at the transactional level.  They need to exist at the personal level where relationships are developed; and it is these relationships that will turn the branch from a primarily transaction center into a home for loyal customers.  This is good news for banks and the crisis they are currently facing.  Trusted banks and their branches are an important source of client engagement and revenue generation.

The future is therefore bright for bank branches. They will be a revived source of business for banks. Customer loyalty, through staged customer experiences, will increasingly turn banking towards cross-selling and value-added advisory services.  By connecting rational and emotional elements, branches will reinstall trust in financial institutions and regenerate economic growth.

Customers have shown that they want to work with their bank branches; now banks have to find ways to make this a worthwhile and profitable experience for both parties.

Sources:
“Bank branch transformation: The new multi-channel reality”, CEO Eontec Limited and Mark Greene, General Manager, Global Banking Industry, IBM Corporation, The Bankwatch, March 23rd, 2005
“Bring Back the Branch”, Deloitte &Touche, September 2002
“Banks Race to add Branches”, USA Today, 19th June, 2003
“Inside Apple Stores, a Certain Aura Enchants the Faithful”, New York Times, 27th December, 2007
“How to Develop Stronger Retail Partnership to Accelerate Small Business Sales”, Martha Crawford, NBW Consulting Group, American Banker 8th Annual Small Business Banking Conference, October 2003
“Customers still like to use bank branches”, Dennis Jacobe, Northwestern Financial Review, August 1 – August 14, 2003
“The Branch Bank is Dead, Long Live the Branch Bank”, David Webber, The Banker, November 2000
“Long Live the Bank Branch”, Greg McBride, Bankrate.com, May 17, 2004
“Retail Banks Must Redefine Role of Teller to Meet Customer Demand and Achieve Overall Cost Savings”, Tom Brogan, TowerGroup Research, July 2008
Damasio, Antonio.  Descartes’ Error.  Putman Publishing, 1994.
Lehrer, Jonah.  Proust Was A Neuroscientist.  New York: Houghton Mifflin Company, 2007.
Rapaille, Coltaire.  The Culture Code.  New York: Broadway Books, 2007.
“Has the Bank-Branch Frenzy Peaked?”, Sewell Chan, New York Times, September 10, 2007.

About the Authors
Dr. Nicos Rossides: CEO MASMI Research Group

Dr Rossides is Group CEO of MASMI, a leading independent research agency operating in Central Eastern Europe and the Middle East.  Prior to joining MASMI he was CEO for Synovate’s CEEME region, the global head of solutions as well as CEO for its Loyalty Practice.

Nicos has more than 20 years of market research and consulting experience, much of which involved developing a research infrastructure in Central and Eastern Europe.

Prior to becoming a market researcher, Nicos was Senior Research Fellow at Kyoto University, where he received a Doctor of Engineering degree.  A Fulbright and Mombusho scholar, he also received senior management training at MIT’s Sloan School.

Nicos has published a large number of articles in professional journals, contributed papers to numerous conferences and lectured at several universities and symposia.

Bud Taylor: Director Consulting MASMI Research Group

Mr. Taylor is a senior associate with MASMI where he advises clients on how to put their research data to work.  Prior to MASMI he was an SVP and Global Director of Consulting for Synovate Loyalty.  Before joining Synovate Bud was a Partner with Deloitte where he led its change practice in the US southwest.

Bud is a Canadian and naturalized US citizen.  For over 30 years he has consulted to marquee clients in all major business sectors and in all parts of the world.  Bud’s clients include: Microsoft Europe, the National Commercial Bank (Capital) of Saudi Arabia, the Whirlpool Corporation, Sony Electronics, and the Overseas Chinese Banking Corporation.

Bud contributes articles to professional journals and has published a business book: Customer Driven Change that demonstrates how to unite customers, managers, and employees in the process of organizational transformation.

Technorati Tags: Banking, Branch, Lives, Nine

Speedware Ltd. Will Discuss Legacy Modernization for Financial Services Organizations at the 2008 Financial Services Technology Forum

October 06, 2008 – Toronto, Canada – Jennifer Fisher, Director of Sales at Speedware Ltd. will discuss the benefits and drivers for legacy modernization activities and introduce its various techniques and strategies at the 2008 Financial Services Technology Forum scheduled on October 28 & 29, 2008 at the Design Exchange in Toronto, Canada. 

Register now for your complimentary All-Access Pass.
Visit http://e-financial.wowgao.com/registration/multiple  

Legacy Modernization for Financial Institutions – What is it?  And Why do You Need it? 

Legacy modernization has become an increasingly popular option for financial institutions looking to optimize their IT. This session will explore the many benefits financial institutions can expect from legacy modernization including lowered maintenance costs, increased business agility and the availability of new technologies. Critical drivers for legacy modernization activities will be examined, including the rising maintenance costs of legacy applications, the need to align IT with business objectives, the shrinking pool of qualified resources capable of understanding and maintaining these applications, and the need to upgrade to modern, more flexible systems. 

An overview of the full spectrum of legacy modernization projects will be provided as well as techniques for assessing the health of legacy applications. A discussion on how to plan and execute a successful legacy modernization project will be included, along with a review of various modernization strategies and tips for staying on budget and on time.  Finally, case studies will be provided highlighting success in the financial services sector. 

Ms. Fisher is Speedware’s Sales Solutions Strategist and is responsible for managing the worldwide sales force for both for private and public sector organizations. Her responsibilities include expanding market reach, developing vertical markets and driving Speedware’s IT modernization market strategy by promoting a solutions-oriented approach that strives to analyze and understand specific customer requirements. Ms. Fisher has been actively developing the financial institution market and has been involved in implementing successful modernization projects for customers such as ING and Massachusetts Mutual. 

About WowGao Inc.

WowGao Inc. is an award winning leading event management company that produces, since 2003, internationally renowned conferences and expositions that address the latest innovations and developments in the information technology industry. For more information about the events, please visit http://www.WowGao.com/ 

Director of Marketing,
416-292-0038 ext 812
attendee@wowgao.com

Technorati Tags: 2008, Discuss, Financial, Forum, Legacy, Ltd., Modernization, Organizations', Services, Speedware, Technology

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Step By Step Loan Modification Workbook With Bank Ready Forms.

Teaches In Step By Step Easy To Follow Format How To Work With A Lender To Prepare And Submit A Loan Modification Package. Teaches How To Avoid Scammers And Con Artists. This Product Saves The Thousands Of Dollars Charged By Ineffective ‘Mod Companies.’. Step By Step Loan Modification Workbook With Bank Ready Forms.

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Sub Prime Loan Modification

Sub-prime lending is a type of credit given to homeowners who do not meet the criteria for regular (“prime”) loans. A typical sub-prime borrower has a poor or limited credit history and a FICO score of less than 620. These factors make them a risky investment for regular lenders, which keeps them from taking out loans. To compensate for the risk, sub-prime lenders impose higher costs on their contracts. For credit cards, this is usually a higher fee for over-the-limit spending or late fees. Sub-prime mortgages usually have higher interest rates and stricter terms.

Contrary to popular belief, sub-prime lending is a perfectly legal business. But like many new industries, it has been tainted by lenders who don’t play by industry standards. From 2003 to 2007, shady companies have turned up offering terms ranging from unfair to downright illegal. This, along with the economic slowdown, has contributed a great deal to the real estate crisis that forced many homeowners into foreclosure.

Are all sub-prime loans bad?

No. There are actually some sub-prime companies who give you good value for your money. If you find a good lender and stay current, sub-prime lending can have its benefits.For example, many people use sub-prime loans as a means of credit repair. Basically, it gives you a chance to rebuild your credit history and improve your scores. By keeping up a good record on sub-prime loans, you can eventually refinance to better terms and get back on your feet.

How do I know when a loan is sub-prime?

The first thing you should look at is the cost of the loan. Sub-prime loans have a higher overall cost (including interest, origination and closing fees) compared to prime loans. Although the basic formula is the same for both types, the pricing for sub-prime loans is more noticeably risk-based. A low credit score, small down payment, and other negative factors can greatly increase the cost of a sub-prime loan.

Another common feature is the prepayment penalty. Prepayment is when you pay more than the minimum monthly amount, or pay off the loan ahead of schedule. The penalty is to make up for lost interest on the lender’s part. Because you’re getting off early, the lender stops earning regular interest—and naturally, they charge you for it.

Many sub-prime mortgages follow the 2/28 structure. This means that you pay a fixed interest rate for the first two years, after which the loan switches to an adjustable rate where your payments are determined by market indicators. Often, the introductory rate is higher than the current index and the margin is applied once the loan shifts. For example, a lender can give you an intro rate of 8% while the index is currently at 4%, with a margin set at 6%. Assuming the index stays the same; your rate can jump to 10% when your two years is over.

What can I do if I’m in a sub-prime loan?

Fortunately, there are laws in place to protect borrowers in any loan, prime or sub-prime. For instance, the Real Estate Settlement Procedures Act (RESPA) requires all lenders to give you a good faith estimate of the total cost of the loan before closing any deals. This prevents any third party, such as mortgage brokers, from making any kickbacks at your expense.

All mortgages are also covered by the Truth in Lending Act (TILA). This law gives you the right to know the full lending terms and loan costs in any credit transaction, including credit cards. The TILA allows you to opt out of a transaction within a reasonable time if you don’t agree with some of the terms.

If a sub-prime mortgage has put you in financial difficulty, another thing you can do is apply for Loan Modification or in this case Sub Prime Loan Modification refers to an agreement between you and your lender to change the terms of your loan on account of your financial situation. This way you can modify your loan terms to a more affordable level. The Sub Prime Mortgage Loan Modification is a lengthy and time consuming process. However a competent loan modification attorney can expertly handle your case and expedite the loan modification process. A loan modification attorney will expertly present your case and use the above mentioned lending laws as leverage to get you more reasonable rates. If you’re already in foreclosure, this will also stop the process while you work out better terms with your lender.

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Most Common Banking Definitions That You Need to be Familiar With

Banking definitions to know in a society that needs money to purchase many of the necessities of life, banking is a very important business. It primarily deals with finances and all the instruments related to credit so it is important to know the important banking definitions. Banks are the financial institutions that act as the instrument in transferring monetary values from a customer to a seller, merchant, or to another individual.

We see a lot of banks and sometimes we may wonder what they have in common and how do they differ from each other. Banks have been differentiated according to their primary functions, the primary functions being acceptance of deposits and loans. The deposits are open to withdrawal and transfer via checks.

What are the activities in the bank?

* As a payment agent, the banks provide checking accounts that customers use to pay checks. There are also other means to pay like the telegraphic transfer, the automated teller machines or ATM, or the EFTPOS (Electronic Funds Transfer at Point of Sale).

* Issuance of debt securities like banknotes, promissory notes, and bonds when banks borrow money from current account deposits.

* Issuance of bank drafts and bank checks

* Lending of money to customers through mortgages or loans

* Provide letters of credit, guarantees, and performances bonds

* Acceptance of documents and other items for safekeeping in safety deposit boxes

* Payment services that cater to government, businesses, individuals who prefer to transact through the bank instead of non-bank remittance services.

* Foreign currency exchange

* Inter-bank clearing and settlement of payments regardless of geographical locations

* Intermediation for credit

Banking is a process that involves a bank and its customer. The bank has been defined previously. The bank’s customer is that individual who keeps an account in the bank and agrees to be covered with the laws that govern banking.

The government regulates most commercial banks and they need a license to operate. In order to get a bank license there are requirements like minimum capital, minimum capital ratio, fit-and-proper qualifications for the owners, and board of directors, and the approved business plan. There are some financial entities that are exempted from licensing (some partly, some fully) like the credit unions.

What are the types of banks?

Since we’re talking about banking definitions, we might as well define the types of banks, there are many and certain banks specialize in specific areas.

Retail Banks are banks that deal directly with the individuals or small businesses. There are different banks under this type:

* Commercial bank

Commercial banks have a variety of services aside from deposits and loans. The banks that fall under this category are the national banks, trust companies, stock savings banks, and industrial banks. Aside from the primary functions, they also handle investments and many facets of savings like time deposits.

* Community bank and Community development banks

These are financial institutions that are operated locally. They are regulated to provide services and credit within their local jurisdiction, therefore catering to underserved customers.

* Savings bank

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A Must Read Before Acquiring A Secured Credit Card

Banks and other lending entities and companies exist for business. And since business is their priority, profit must never come out their way. All businesses regardless of its capital’s size have goals to expand and earn. The system is so simple, product as equivalent to the capital, added with a percentage for profit equals business. Businesspersons always make sure that their capital is not being compromised and they are determined to gain out from the capital.

This idea holds true to credit banking and loans. The lifeblood of this business is the interest. It is where the gain that the company gets come from. However, in loans and credit banking, an amount as part of the companies’ capital is being given in the form of cash or notes. This capital needs to be returned in due time to keep the capital growing and rolling. When a debtor or a credit card holder doe not pay and intentionally runs away from his dues, the interest or the gain of the company is accumulated but the capital is lost.

This is why there are secured and unsecured credits. In a secured credit, the company will ask for a collateral equivalent to the actual amount owed. In the case of a house loan, the house is the collateral for the mortgage. The collateral will later be acquired by the company and sell it to bring back the capital that was lost from the debtor.

Secured credit cards use the same system. While on house loans the house is the collateral, and in car loans the car secured credit cards use the bank account that contains the amount equivalent to the credit. By doing so, the company will not have any reason to doubt whether a creditor will pay the dues.

Secured credit cards may have lower interest rates since the capital used by the company is being secured by the amount they considered as collateral. In unsecured credit cards however, interest rates may be higher than the secure credit cards since they do not have a hold to any collateral except for the promise of the debtor to pay his dues.

Secured credit cards can be acquired in any bank near you that offers such service. In general, all banks use secured credit cards rather to facilitate more the credit procedure. The higher the deposited amount, the broader the credit limit that a bank may award. In so many cases, banks give rewards to good payer creditors. These rewards maybe in kind or in cash. Cash are sometimes added to the deposit of the creditor and need not to ask the latter of a further deposit to the said account but adding up to the credit limit.

Most of the time, the bank asks for a deposit more than or equal to the credit limit. This means that banks would actually charge a client $ 300.00 to $500.00 as deposit or as guarantee for the credit card.

Secured and unsecured credit cards have their individual disadvantages and advantages. However, the performance of the credit card, secured or unsecured will now be on the shoulders of the company responsible for it. The policies of the lending companies and or the banks are what makes the credit card ugly. Interest rates are part of it, it is the life blood of the company, however, too much interest and climbing rates are no longer just for the clients.

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Dalian 2009 – Financing Global Growth: Time for a New Paradigm?

www.weforum.org 10.09.2009 Governments – through guarantees, asset purchases and lending facilities – have provided over US$ 8 trillion to support the banking sector and continue to promote lending; yet, for many, corporate credit is still unavailable. As the rules of international finance are rewritten, how will companies fund future global growth? Rashad Y. Janahi, Managing Director and Board Member, Abu Dhabi Investment House, United Arab Emirates Ronald Kent, Executive Vice-President, Head of International Listings, NYSE Euronext, United Kingdom Li Yang, Vice-President, Chinese Academy of Social Sciences (CASS), People’s Republic of China Luis Guillermo Plata, Minister of Trade, Industry and Tourism of Colombia; Young Global Leader; Global Agenda Council on Economic Growth & Development Christopher Rodrigues, Chairman, International Personal Finance, United Kingdom; Global Agenda Council on Emerging Multinationals Levin Zhu, President and Chief Executive Officer, China International Capital Corporation, People’s Republic of China Chaired by Stephen Engle, China Correspondent, Bloomberg News, People’s Republic of China

Technorati Tags: 2009, Dalian, Financing, Global, Growth, Paradigm, Time